The first few weeks of Chapter 13 can move faster than you expect. Your plan payments may begin before the court approves your repayment plan.
Federal bankruptcy law requires you to begin making Chapter 13 plan payments no later than 30 days after you file your proposed plan or the order for relief, whichever date is earlier, unless the court orders otherwise. In a voluntary bankruptcy case, the order for relief occurs when you file your bankruptcy petition. Knowing what to expect during those first few weeks can help you avoid missing your first payment.
When is your first Chapter 13 payment due?
That 30-day deadline can arrive before the court holds the confirmation hearing, which is when the judge reviews whether your proposed repayment plan meets the requirements for approval.
The amount you pay is generally based on the plan you proposed when you filed. If the plan later changes, your required payment may change as well.
How do you make Chapter 13 payments?
Your Chapter 13 trustee, who oversees the administration of your repayment plan, will provide instructions explaining when and how to make your required payments. Because payment methods and administrative procedures can differ, reviewing the instructions provided for your specific case can help you avoid payment problems.
You can help keep your payments on track by:
- Confirming the amount currently due
- Following your trustee’s payment instructions
- Keeping records of when and how you paid
Failing to begin your required payments on time can create serious problems for your Chapter 13 case. If the payments do not begin as required, the trustee may ask the court to dismiss the case, which could end the bankruptcy before you complete the repayment process.
When questions arise about your first payment
Chapter 13 payment requirements can depend on the information filed in your case and the procedures your trustee follows. If you are uncertain about the amount, timing or procedure that applies to your situation, professional guidance can help you understand your responsibilities and address potential problems before they interfere with your bankruptcy case.