Bankruptcy Lawyers Philadelphia - Payments To The Chapter 13 Trustee
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PAYMENTS TO THE TRUSTEE. Pursuant to 11 U.S.C. § 1326(a)(1), the Debtor must begin payments under the Plan to the Trustee within forty-five (45) days of filing the Bankruptcy Petition. Thereafter all payments will be due on the same date each month. Attorneys must tell their Debtor clients HOW MUCH TO PAY AND WHEN THE FIRST PAYMENT IS DUE. If you are unsure of the precise "final" amount, give a "tentative" amount (subject to PPS change after the § 341 Meeting) so timely payments may commence. The "tentative" amount should be as close as possible to the expected final amount and not just some nominal sum, so the Debtor can immediately learn to work it into their budget. The Debtor is responsible for curing any arrears and being current with all plan payments from the date of filing until completion of the plan. The Trustee uses a bank lock box to collect all plan payments. Please note the following regarding payments to the Trustee.

A. Payment Requirements.

Mail Plan Payments to the following address:

Standing Chapter 13 Trustee

P.O. Box 94210
Lubbock, Texas 79493-4210

Failure to send payments to this address could result in the Trustee filing a Motion to

Dismiss your bankruptcy case for failure to comply with the Trustee Guidelines.

  1. DO NOT SEND CASH. The Trustee will only accept a check or money order as payment.
  2. MAKE CHECKS OR MONEY ORDERS PAYABLE TO: STANDING CHAPTER 13 TRUSTEE.
  3. ALWAYS PUT YOUR BANKRUPTCY CASE NUMBER ON YOUR CHECK OR MONEY ORDER. If you do not include your case number on your check or money order, we cannot assure that your payment will be credited properly to your case. Always keep a copy of your money order in case your money order payment is lost.
  4. DO NOT POST-DATE YOUR CHECK OR MONEY ORDER. All post-dated checks and or money orders will be returned to you.
  5. ONE MONTH HOLD ON DISBURSEMENTS. The Trustee makes disbursements to creditors between the 25th and the last day of each month. All Debtor payments received by the bank in the form of personal checks less than 15 days prior to the date of disbursement will be held until the next month to ensure that the Trustee has collected funds.
  6. DO NOT SEND PAYMENTS BY MAIL SERVICES THAT REQUIRE SIGNATURE UPON RECEIPT. Payments are sent to a lock box for the bank and no one can sign for mail received.

B. Failure to Begin Payments Within 45 Days.

If a Debtor fails to begin making Plan Payments within 45 days after the Petition is filed as required by 11 U.S.C. § 1326(a)(1) of the Bankruptcy Code, the Trustee will issue a written NOI to the Debtor and the Debtor's Attorney giving them 48 hours to make the required payment. If the Trustee does not receive the payment within this time, the Trustee shall submit to the Clerk, an Order Dismissing the case per the NOI.

C. Failure to Make Continuing Pre-Confirmation or Post-Confirmation Payments. If payments are not made timely, the Trustee will file a Motion to Dismiss and set it for hearing on the next available Court Docket. Both the Debtor and Debtor's Attorney will receive a minimum of 20 days notice thereof. The following options are available for the Debtor if a Motion to Dismiss is filed for non-payment:

  1. Cure arrearage with certified funds
  2. File a response to the Trustee’s Motion to Dismiss for non-payment and have the matter automatically set for hearing on the date, time, and place indicated within the Motion. The response must specifically set out how the debtor plans to cure the arrearage.
  3. Fax or email a signed copy of an Interlocutory Order or Agreed Order to the Trustee two days prior to the scheduled hearing date. The Interlocutory Order or Agreed Order should indicate how the arrearage stated in the Motion to Dismiss will be cured. It is the Debtor Attorney’s responsibility to maintain all original signed Interlocutory Orders or Agreed Orders.
  4. Do nothing at all and the case will automatically be dismissed after the twenty (20) day response time has expired.

D. Non-Sufficient Funds (NSF) Checks. If the Trustee receives a check returned as NSF, the Trustee will no longer accept the Debtor’s personal check. NSF checks must be replaced within 7 days by certified funds or the Trustee will file a Motion to Dismiss the Chapter 13 case. All future payments made by the Debtor shall be certified funds. If an NSF check is received for the first payment due 45 days from filing the petition, certified funds must be sent immediately to the Trustee’s lock box address and proof of such payment sent to the Trustee’s office by mail, fax, or email before the 48 hour deadline mentioned above. Failure to send proof may result in the Trustee taking action pursuant to G.O. 98-4 and G.O. 2003-03.

E. Payments Inside and Outside the Plan. Payments to all creditors may be disbursed by the Trustee from plan payments of the Debtor. The Trustee will not object to direct payments on over secured unimpaired creditor claims. All home mortgage arrearage claims and pre-petition tax claims must be paid by the Trustee.

F. Plan Payment Changes Prior to Confirmation.

The Trustee will not allow plan payments to be changed retroactively or prior to the 341 PPS. Only future plan payments, which have not yet become due pursuant to the most recent PPS filed with the Clerk, can be changed. Once a monthly plan payment has become due, the payment can not be changed to a higher or lower amount. It is very important that Debtors budget themselves carefully so that plan payments can be made each time they become due. If Debtors find that they cannot make plan payments prior to confirmation, the PPS, APD and the budget (Schedules I & J), which reflects the monthly payment that the Debtors can make in the future, must be amended and filed with the Clerk.

G. Plan Payments by Wage Withholding Orders and Trustee Directives.

Trustee Directives are put in place to help assure success of the Chapter 13 plan and for the convenience of the bankruptcy process. Until the wage withholding is deducted from the Debtor’s pay, the Debtor is responsible for making all payments to the Trustee's lock box. After the § 341 Meeting, the Trustee will prepare a Directive per Standing Order 2003-03 upon the debtor’s request. The directive will then be sent to the Debtor’s employer instructing that the Debtor's payments be withheld from the Debtor's pay and sent to the Trustee lock box for disbursement to creditors. Payments shall be withheld on an equal basis each pay period to the extent necessary and possible to fund the Plan. If plan payments change, the Trustee shall send an amended directive to the Debtor, employer, and Debtor’s Attorney. If the Trustee receives written notice of termination of Debtor’s employment, the Trustee shall send a termination of the directive to the Debtor, employer, and the Debtor’s Attorney. Cases with a wage withholding order already on file with the Clerk will be processed according to General Order 98-4. All amendments and terminations of wage withholding orders will be filed with the Clerk.

 
This website contains legal information, and not legal advice. It's content refers only to the law of the State of Pennsylvania.
Law Offices of David M. Siegel
Philadelphia, PA
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
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