When is My First Chapter 13 Trustee Payment Due?

When is your first payment to the Chapter 13 trustee due? This issue continues to confuse Chapter 13 debtors although the answer should be obvious.

In the Northern District of Georgia, where I practice, your Chapter 13 payment obligation begins immediately. If your case is scheduled to be paid via a payroll deduction order (all cases in the Northern District of Georgia must have a payroll deduction order unless the debtor is self employed), you are still personally responsible for sending the trustee you weekly, bi-weekly or semi-monthly payment until the payroll deduction kicks in.

If your employer fails to withhold funds, if the employer fails to mail the trustee funds, or if the employer withholds and sends in the wrong amount, you are required to fix the problem by sending in enough money directly to make your plan current.  This means that you must take an active role in your Chapter 13 plan and do not rely on anyone but yourself to insure that your Chapter 13 plan payments are current.

If you were under the misconception that somehow your payment obligation to the trustee did not begin until after confirmation, you will end up with a dismissed case.

Over the course of the past 20 years I have participated in and observed thousands of Chapter 13 341 hearings.  I would guess that in 75% of these cases, the Chapter 13 trustee filed a funding objection.  You can eliminate funding objections by assuming that the payroll deduction order will not kick in right away and recognizing that you will need to send in to your trustee at least one bi-weekly or semi-monthly payment.  If you are paid weekly, assume that you will need to send in two, three or even four payments.

When you mail a payment to the trustee do not forget to include your name and case number on your check or money order.

Finally, during the course of your Chapter 13 case, check the status of the funding of your case.  In the Northern District of Georgia, you can call the trustee to ask, or ask your lawyer to download and mail you a status report every year or so.  A little bit of proactive action on your part can save a great deal of hassle down the road.

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