Bankruptcy

When Is My First Chapter 13 Payment Due?

By Adrian Lapas, Eastern North Carolina Bankruptcy At

You’ve met with your attorney; you’ve signed your papers and now, your only question is “when is my first payment due?  Under the Bankruptcy Code, your first payment is due “not later than 30 days after the date of the filing of the plan or the order for relief.”  See 11 U.S.C. § 1326(a)(1).  What this means is that, as my district ordinarily explains, your payment is due on the first of the month after the month you file.

As an example, if you file your case on April 3, 2010, your first payment will be due to the chapter 13 trustee on or about May 1, 2010.  Similarly, if you file your case on April 29, 2010, your first payment will be due to the chapter 13 trustee on or about May 1, 2010.  Your attorney will instruct you where to send the payments. 

Often the question will come up, “I don’t have to make my payment until I go to court, right?”  Wrong!  Many times your § 341 Creditors’ Meeting will take place after your first payment will be due.  It is very important that you make your chapter 13 payment on time as stated above even if your have not “gone to court” for your bankruptcy case.  If you do not make the payment, the chapter 13 trustee may file a Motion to Dismiss your case or, at a minimum, you will have two payments to be made very shortly.  Remember, your payment is due at the first of the month after the month you file.

It should also be stated that local practice varies from district to district and sometimes, even within districts.  You may rely on your attorney’s advice about when and where to make your chapter 13 payments.  He or she has been filing a lot of bankruptcy cases and knows how the particular chapter 13 trustee likes for things to proceed or the court may have a standing order that the first payment is due in a certain manner.

But the important thing is that you get that first payment in on time!  You don’t want to start your chapter 13 case out on the wrong foot.

Full post as published by Bankruptcy Law Network on May 19, 2010 (boomark / email).