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Chicago Bankruptcy Question: How do I make my Chapter 13 payments?

Chicago Bankruptcy Question of the Day: How do I make my Chapter 13 payments?  When you file for Chapter 13 bankruptcy protection in Chicago, a repayment plan is filed with the court that usually requires monthly payments be made to your Chapter 13 trustee.  Your first payment will be due thirty days after the filing of your case and the payments generally last between three to five years, depending on the specifics of your case. Currently, there are two ways in which you can make these Trustee payments.

The first way is to mail the payment directly to the Chapter 13 trustee.  All of the Chapter 13 trustees in the greater Chicago area use a processing center in Memphis, TN to process their payments.  All payments must be made in certified funds (money order or cashier's check) with the case number on the payment and sent by regular mail to the processing center.  This is a lockbox center, so there is nobody there to sign for express mail or certified mail delivery.  Any payments made by personal check or sent by overnight or certified mail will be returned to the sender.

The second option is to enter into a voluntary payroll deduction order.  This allows the monthly Chapter 13 payment to be broken down and deducted directly from your paycheck.  Your payroll department then sends the payment to the Chapter 13 trustee.  When possible, most Chicago bankruptcy attorneys will strongly recommend this option.  It makes budgeting easier, since it is a smaller deduction taken more frequently, and it makes all parties more comfortable that payments will be received by the trustee.  While this is voluntary, the court does have the ability to require payroll deduction.  Generally they will only do this if there have been multiple filings by the same party or if the filer consistently falls behind in their payments.

At this time, none of the Chicago Chapter 13 trustees allow for electronic payments, online payments or accept personal checks, even when they are issued by the bank.  We do believe that it is inevitable that online payments will be accepted some day in the near future, the trustees are not there yet.

You bankruptcy attorney should advise you clearly and concisely on exactly how much your payment is, along with when, where and how you need to make that payment.  The experienced Chicago bankruptcy attorneys at Ledford & Wu make every effort to ensure that our clients are fully informed of the payment process from day one.  Call us today for a free consultation.

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