Electronic Payment Options Come to Southern Illinois Bankruptcy Cour...

Chapter 13 bankruptcy debtors can send monthly plan payments electronically to the chapter 13 trustee under a new program available in the Southern District of Illinois Bankruptcy Court – East St. Louis division.

The new electronic payment options make it easier for self-employed debtors to make chapter 13 bankruptcy plan payments each month.  Previously, bankruptcy debtors who directly paid their payment had to get a money order or a official bank check because the trustee does not accept personal checks.  Now, debtors can choose from two different companies to process monthly plan payments electronically.  Employed debtors can choose to have their payments payroll deducted through work.

One electronic payment company, ePay, operates much like a check, deducting money from the account when the payment clears the bank.  There is a $2.00 service charge for each payment made using ePay.  Debtors must log on and activate a payment one at a time.  Insufficient fund transaction fees apply and use of ePay will be terminated if a payment is returned for any reason, according to the trustee.  Also, the trustee places a 15 day hold on all payments received from ePay.  ePay is available for debtors to pay extra money to the trustee in addition to the monthly plan payment and for debtors who need to catch up on delinquent payments.

The other company, Nationwide TFS, takes a direct withdrawal from the bank account through automatic monthly payments.  Fees vary from $1.99 to $9.99, based on the amount of the transfer.  Insufficient fund fees are $25 per transaction.

Nationwide TFS hold payments for 8 days before sending the money to the bankruptcy trustee.  Once the trustee receives money from Nationwide TFS the money is available for distribution to bankruptcy creditors.

These programs are available options in all new cases.  They are not available to debtors who are currently under a Bankruptcy Court Wage Deduction Order, though such debtors can enroll in either program if that wage deduction order is vacated or if those debtors change employment.