Why Does My Trustee Payment Go to an Address in Another State?
By Däna Wilkinson, Attorney at Law on Oct 10, 2007 in Chapter 13 Bankruptcy, General Bankruptcy Information, South Carolina
Many Chapter 13 trustees across the country direct debtors to mail their plan payments to a post office box in another state. This is usually because the trustees use a clearinghouse bank to collect payments from debtors, and issue distributions to creditors. The banks process both receipts and disbursements for the trustee, although the latter must be authorized by the trustee.
The trustees in my district have a policy of refusing to accept most payments at their offices, putting them in the rather odd position of refusing payments. There are a couple of reasons for handling things this way. One is security. The trustee, who generally has a fairly small staff, does not have to have elaborate procedures in place to handle money. Another is cost-savings. The bank is going to have to have someone handle all those incoming transactions anyway. It is more cost efficient to let them do it all, rather than have employees in the trustee’s office performing many of the same functions.
One more thing to note about these clearinghouses for Chapter 13 trustees–they handle a lot of payments for a lot of different trustees. The one used by trustees in my district handles payments from approximately 90 trustees, from all over. Literally. From Puerto Rico to Utah. Trustees in my district send instructions to debtors, including a packet of stickers. The stickers have the case number on them, and are intended to go on the check or money order. However you do it, your case number should go on every payment. Don’t assume that your payment will be credited to the right case if you don’t. With that many cases, it’s a good bet your name is similar enough to someone else’s to get confused.
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