Custer Park Bankruptcy Lawyer Recommends Chapter 13 Payroll Control

Upon 30 days after filing, the first payment is technically due to the trustee.  The plan payment in our example is $800 per month.  Now, much like how EFT is mandatory if you have a checking account for Chapter 7, Chapter 13 has some internal requirements as well.  If they are working a job where they get a paycheck, payroll control is mandatory.  It is not a garnishment; it is a separate order that the judge signs called payroll control.  The money for the Chapter 13 trustee payment or plan payment, whatever you want to call it, comes directly out of their check every pay period.  There is no forgetting.  If they can stay employed, they are going to have success.  So in our example here it was $800 a month, if they are paid two times a month, every check would have $400 out.  If they are paid 26 times a year, it would be a little bit less than $400 each check. 

There were times in my career where I would let clients make their own payments and that was a mistake because it’s just like anything else.  If you have to rely on them to make the payment, it is going to come behind the mortgage, it’s going to come behind the food and the entertainment and gas and the kids and whatnot.  This way, it is coming out of the check and so whatever is left, that is what the debtor can live on.  Now, there are some people unfortunately we can’t do payroll control on; commissioned salespeople, self-employed people, etc.

see also Custer Park Bankruptcy Lawyer or call (847) 520-8100.