What Does Pay Outside the Plan Mean?
By Kevin Gipson, New Orleans Bankruptcy Attorney on Nov 2, 2007 in Chapter 13 Bankruptcy, General Bankruptcy Information
Making a payment outside of the plan is a term used in a Chapter 13 bankruptcy.
A Chapter 13 bankruptcy requires the debtor to propose a “plan” of how he will be able to pay the debt that he has that is overdue or in arrears. Payments made on the arrears are payments said to be made “through the plan.”
Payments paid through the plan are payments made usually on a monthly basis to the trustee and then distributed by the trustee to debtor’s creditors.
Also, as part of a Chapter 13 plan the debtor will need to make sure that his debts will remain current. Those payments are referred to as payments being made outside of the plan, because the payments are made directly to the creditor, not through the trustee.
Whether a payment is made through the plan or outside of the plan can depend on many factors and it is best to speak with an experienced consumer bankruptcy attorney to determine the best option for you.
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