Kentucky Bankruptcy Law

Counsel with Care

Plan Payments by Payroll Deduction

This blog post about monthly plan payments is a crucial one. Many of the persons that I assist in a Chapter 13 do NOT want their employer to know they filed bankruptcy. However, I have never seen an employer have a problem with it and the payroll deduction is the best way to prevent problems with the plan later down the road.

Chapter 13 Trustee, EDKY: Trustee's Blog

Plan payments in the EDKY must be made by payroll deduction unless otherwise ordered by the court or agreed to by the trustee.  Many debtors’ attorneys are inadvertently causing their clients to get behind in plan payments because the attorneys and their staff don’t know the rules.  Download this detailed Attorney Info Sheet on Mandatory PDO’s 08252017, and keep reading for important reminders for debtors’ attorneys and their staff regarding payroll deduction orders and plan payments.

If the debtor’s income is from employment, the debtor’s attorney must submit a completed payroll deduction order (“PDO”) at the same time the plan is filed.  Tender the payroll deduction order to the court promptly.  Expect that it will take 4 to 6 weeks for the employer to get the payroll deduction set up, and advise your clients accordingly.

A debtor’s first full monthly plan payment is due 30 days after the…

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September 6, 2017 - Posted by | Uncategorized

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