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About Your Chapter 13 Plan Payments

About Your Chapter 13 Plan Payments

CHAPTER 13 PAYMENTS

All Chapter 13 Plan payments are due thirty (30) days after the bankruptcy is filed. 

If you are employed, then a Motion will be filed with the Bankruptcy Court asking for an Order to be served on your employer requiring that the bankruptcy plan payments be withheld from your wages.

This process takes some time to complete, so I always recommend to the client that if they receive any paychecks subsequent to the filing of their bankruptcy case where wages have not been withheld, that they make the payment directly to the Trustee. 

All plan payments in the Eastern District of Texas have to go the following address:

Chapter 13 Trustee

PO Box 734

Tyler, TX 75710

The amount that is withheld from each paycheck depends on the pay cycle of the Debtor employee.

For example, if you are paid on a bi-weekly basis and your plan payments are $500.00/month, then $230.77 should be withheld from each paycheck.

The reason it is not $250.00 is that there are 26 pay periods in the year for a person who is paid bi-weekly.  The withholding would be $250.00/pay period if you are paid semi-monthly.

Chapter 13 plan payments are withheld from wages in the same manner that child support is withheld, so to reiterate, the amount withheld from each paycheck is determined by how often you are paid.

In our example, if $230.77 is not withheld from the first paycheck you receive after the filing of your bankruptcy case, then you need to remit that amount directly to the Chapter 13 Trustee.

All payments made to the Chapter 13 Trustee have to be by Cashier’s Check or Money Order.  You should retain a copy of the payment for proof and always note your case number on the check or money order.

Presently there are four ways that plan payments can be made to the Chapter 13 Trustee in Tyler.  For a memo regarding these methods directly from the Trustee’s website go here.  If you want to set up a bank account for payments to be made you can find the information on how to set that up through TFS go here.

Please do not send plan payments to our office.  They must be sent directly to the Chapter 13 Trustee.

If your plan payments become delinquent, then you are not in compliance with the terms of your plan of reorganization and the Chapter 13 Trustee will not agree to confirmation of your plan, or in a confirmed case, will move to dismiss your bankruptcy.

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