A Chapter 13 bankruptcy case requires that you make a monthly payment directly to your trustee, who then disburses the funds to your creditors. \u00a0Plan 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.\u00a0 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.<\/p>\n
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”.\u00a0 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.\u00a0 It is simply a deduction from your paycheck, similar to an auto-debit from a bank account.<\/p>\n
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).\u00a0 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.\u00a0 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).<\/p>\n
$300\/month plan payment \u00d7 12 months a year \u00f7 26 weeks of bi-weekly checks = $138.46<\/span><\/p>\n Benefits to wage order:<\/p>\n 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. \u00a0Statistically, debtors who have a wage order in place are much more successful at completing the term of their Chapter 13 plans.<\/p>\n What are your payment options if you do not have a wage order?<\/strong><\/p>\n Payments can be made in the form of a cashier\u2019s 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.\u00a0 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.\u00a0 This will ensure that your payment is credited to your account.\u00a0 Payments sent to the trustee in this way typically take a few business days to process.\u00a0 \u00a0\u00a0If 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.<\/p>\n In Missouri, there is also a new system in place that allows monthly plan payments to be made through the internet.\u00a0 You can go to the trustee’s website at ch13stl.com<\/span>, and on the home page, there is a link for “ePay Online Payments” that will allow you make the payments through the site.\u00a0 You must register for this option, and follow the directions on the website to complete payments.\u00a0 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. \u00a0It 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.<\/p>\n","protected":false},"excerpt":{"rendered":" A Chapter 13 bankruptcy case requires that you make a monthly payment directly to your trustee, who then disburses the funds to your creditors. \u00a0Plan payments are due starting 30 days after your Chapter 13 case is filed, and need … Continue reading \n