How Do I Make my Monthly Chapter 13 Plan Payments?

A Chapter 13 bankruptcy case requires that you make a monthly payment directly to your trustee, who then disburses the funds to your creditors.  Plan payments are due starting 30 days after your Chapter 13 case is filed, and need to be made on time every month until the base of the plan is completed. Often times, after entering into a Chapter 13 bankruptcy case, debtors wonder how they are supposed to go about making their payments to their trustee.  Options for making your monthly plan payment include sending a money order or cashier’s check through the mail to your trustee, making a payment online through the trustee’s website, and setting up a wage order.

While there are a few different ways to make this monthly payment, one of the most successful means is through something called a “wage order”.  A wage order in a Chapter 13 is where a portion of your Chapter 13 plan payment is automatically deducted from your paycheck by your employer/your payroll department. Your employer then sends the money directly to the trustee. While it may seem like the same kind of process, a wage order is NOT a wage garnishment.  It is simply a deduction from your paycheck, similar to an auto-debit from a bank account.

The wage order amount that is taken out of your check is prorated depending on how you are paid through your employer (i.e.- bi-weekly, semi-monthly, etc).  The full monthly amount will not be taken out of one single check; it is broken up into an amount based on how often you are paid.  As an example, if your Chapter 13 plan payment is $300 per month, and you are paid bi-weekly (meaning you receive 26 paychecks per year), then $138.46 would be taken out of each paycheck (see calculation below).

$300/month plan payment × 12 months a year ÷ 26 weeks of bi-weekly checks = $138.46

Benefits to wage order:

  1. You do not have to worry about taking the time out of your schedule to send in a monthly payment to your trustee. The payment is done automatically, which will save you time, hassle, and worrying about the potential for a late payment.
  2. Your payments are guaranteed to be made (so long as your employer is following the order and withholding and disbursing the funds)
  3. You are not tempted to spend the money elsewhere
  4. It splits payments up into smaller amounts, so you don’t have to pay your plan payment out of an entire paycheck
  5. Potential issues with your case, such as Motions to Dismiss your Case for Failure to Make Plan payments, are eliminated.
  6. It allows for an overall successful completion of a Chapter 13 plan

InIllinois, wage orders are required if the Debtor is employed. InMissouri, while it is not required, it is strongly recommended as is ensures payments will be made to the trustee on a regular basis and on time.  Statistically, debtors who have a wage order in place are much more successful at completing the term of their Chapter 13 plans.

What are your payment options if you do not have a wage order?

Payments can be made in the form of a cashier’s check or money order and mailed to the trustee. You can also set up for an official bank check to be sent on a monthly basis directly to the trustee. Your trustee will NOT, however, accept a personal check from you.  You must make sure that you make the cashier’s check or money order out to your trustee and ensure that your name and case number are listed as well.  This will ensure that your payment is credited to your account.  Payments sent to the trustee in this way typically take a few business days to process.    If you are behind on your plan payments and are facing a motion to dismiss your case due to this, contact your attorney before sending in payments this way to see if there is enough time for the payments to be processed before hearing dates, etc.

In Missouri, there is also a new system in place that allows monthly plan payments to be made through the internet.  You can go to the trustee’s website at, and on the home page, there is a link for “ePay Online Payments” that will allow you make the payments through the site.  You must register for this option, and follow the directions on the website to complete payments.  While this option is not as highly recommended as a wage order, this option may be a more convenient option for making plan payments as opposed to sending in money orders via regular mail.  It will also save you money in service charges, as the trustee’s website is a one-time service charge, and using money orders can result in multiple service charges.

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