Do Payments for a Chapter 13 Have to be Deducted from Your Wages?

Do payments for Chapter 13 Bankruptcy have to be deducted from your wages?

Ross W. Krumm, the Chief Judge of the United States Bankruptcy Court for the Western District of Virginia, recently commented on this issue. He said, “You are responsible to make the payments you have promised to make under the plan. I am going to review with you a number of things on Plan Payments that I want you to remember as you go through your Chapter 13 Plan so that you are clear on what you need to do to be successful.

Make your plan payments to the Trustee on time

If you are not going to be able to make a payment or if you are going to be late, call the trustee and your bankruptcy attorney before the payment due date and inform them. If you do not pay the trustee and do not call, the trustee will bring you to court to explain to the judge why your case should not be dismissed. This will cause you to lose time from work and to incur bankruptcy attorney’s fees that can be avoided by a simple call.

Use Wage Deduct

The best way to make sure your payment is always current is to use wage deduction through your employer. Your employer deducts a certain amount from each paycheck and sends it to the trustee to make your plan payment. In this way you are always current.

If you use wage deductions remember the following:

1. Each time you get paid, check your pay stub to make sure the deduction for your Chapter 13 Bankruptcy payment has been made.

2. If there is a pay period when the deduction does not show on your pay stub, set aside the money from your paycheck that usually comes out and do not spend it until you go to payroll and find out why the deduction did not happen. Contact your bankruptcy attorney.

3. If at any time you are concerned that the wage deduction is not working call your bankruptcy attorney.

4. Hold on to all of your pay stubs and keep them together in a safe place.

5. If there is ever a question about whether you have paid your plan payments the pay stubs will show the trustee that the wages have been withheld by your employer.

6. If you change jobs, the wage deduction will stop. You will need to make direct payments to the trustee on the next plan payment due date after your job change. Continue to make direct payments until you put a new wage deduction in place.

7. If you change jobs, you should call both the trustee and your bankruptcy attorney and inform them so that they can help you put another wage deduction in place at your new place of employment.

8. If you do not currently use a wage deduction but will in the future, make sure you make direct payments to the trustee until you see that the wage deduction has started. That way you will be current at all times.

Consider this advice on Direct Payments

If you are going to pay the trustee directly you must be sure that you know the due date of your payment and that you get the payment to the trustee by that date. Mail your payment early enough so that it gets to the trustee by the due date.

Consider this advice about using Money Orders

If you pay by money order, save all your money order receipts and keep them together. They are your proof of payment.”

Obviously, you have the choice to make direct pay or have the payments taken from your wages. What should be obvious to you as well, the judge talks about a bankruptcy lawyer a lot in his advice.

If you need relief from the stress of debt and you live in or around the metropolitan area of Atlanta, Georgia, contact us at .We will help you find a bankruptcy attorney in your area who will answer your bankruptcy questions.

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