If you have filed a Chapter 13 bankruptcy case, then your first payment of the Chapter 13 plan is due within 30 days of the date you filed. Your payments are made to the Chapter 13 Trustee, not the Bankruptcy Courthouse or the Bankruptcy Court Clerk. The Trustee acts a lot like an accountant. He keeps track of everything you pay into your case, and he handles sending payments out to your creditors so you never have to deal with your creditors directly.
Here in North Alabama, the Trustee prefers if you make your payment through a payroll deduction. The Trustee’s office will send a request to the payroll department of your company to have them automatically deduct the payments from your pay check. This is usually the easiest way to make payments since you don’t have to worry about forgetting payments. Also, your payroll department will divide your payments into smaller amounts spread out over a month’s worth of pay checks so you don’t have to worry about making a lump sum payment. However, it is very important to keep an eye on your paycheck to make sure your employer is actually deducting the payments and sending them to the Trustee. The Court will ultimately hold you responsible for making the payments, even if it’s your employers fault for not making the payments as they are supposed to.
If your company doesn’t allow for payroll deductions, then you will have to mail in the payment yourself. A Money Order or Cashier’s Check is the best way to send the payment, but some Trustees will also accept personal checks. The most important thing to remember is that you must include your Chapter 13 case number on the payment you send. Otherwise, the Trustee will not know whose account the payment is for. Another thing to keep in mind is that some Trustees (including our Trustee in the Northern Division) count payments by the day the payment is received, not by the day it is mailed. So if you wait to mail a payment until the last day of the month, the Trustee’s records will show that you missed that month’s payment and made a payment for the next month. Usually this isn’t a problem because the Trustee understands that many people wait until the end of the month to make their payments.
Every Trustee has his or her own local rules about how your case is administered. The attorneys at our Bond & Botes affiliated attorneys are all experienced and knowledgeable about local practices and procedures. If you have questions about Chapter 13, or any kind of bankruptcy, please don’t hesitate to contact us to set up a free initial consultation.