In a Chapter 13 Bankruptcy, Pay Early and Pay Often

14 Dec In a Chapter 13 Bankruptcy, Pay Early and Pay Often

The Bankruptcy Code requires Chapter 13 debtors to make their first plan payment within 30 days of filing their case, but they should make their first payment as early as possible.

If you file Chapter 13, you are required to make your first payment within 3o days of filing your case. But pay it as quickly as possible right after you file your case.

Chapter 13 trustees use a lock box system in which payments are mailed to far away locations. For example, our Charleston division trustee’s lock box is in Memphis, Tennessee. After the check gets to the lock box, it must be entered into the trustee’s computer system. All this takes time.

I tell my clients that making timely payments in their cases makes up for a multitude of sins. What I mean by this is that if payments are being made as required, many other issues with their cases can be fixed. You can’t fix a case where the client isn’t paying, though.

It’s especially important to make that first payment early. There’s not much worse for a bankruptcy lawyer than attending a Chapter 13 client’s bankruptcy hearing and having the trustee ask the client, “why haven’t you made your first payment?”

Many times, the client has made the payment. But I know the trustee is really wondering if the client really has mailed the check. Trustees really don’t want to hear, “the check’s in the mail.”

Maybe it is, but I assure you that any Chapter 13 trustee has been lied to about a payments being made which really hadn’t been. They’re an understandably skeptical bunch of people. Getting that first payment in demonstrates that you are serious about your case and that you’ll comply with the terms of the plan you filed.

And this logic still applies after you case is confirmed. If your attorney needs to ask for some leniency a year or so into you case, it helps if he can point to a stream of on-time payments.

So make your Chapter 13 trustee happy: pay early and pay often.

Russell A. DeMott is a bankruptcy attorney in Charleston, South Carolina representing clients in Chapter 7 and Chapter 13 bankruptcy.

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Russell A. DeMott is a Charleston, South Carolina bankruptcy lawyer who represents consumer debtors in Chapter 7 and Chapter 13 bankruptcy. He is the author of the Charleston Bankruptcy Blog. He is also a member of the South Carolina Bankruptcy Blog. He files bankruptcy cases for clients in the Charleston, South Carolina division, which runs from Myrtle Beach to Beaufort. The DeMott Law Firm also represents clients in foreclosure defense and mortgage modification. You can also connect with Russ on Google Plus Russell DeMott. Russ can be contacted directly at (843) 695-0830 or by email at

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