Chapter 13: Failure to make first payment to Trustee

After a Chapter 13 case is filed with the U.S. Bankrutpcy courts then a Chapter 13 Trustee is assigned the case. The Debtor is due the 1st payment to Trustee within 30 days of filing date. If Debtor fails to make the first payment then the Chapter 13 Trustee will file 3 day Notice of Intent to Dismiss (NOI). The Chapter 13 Trustee also schedules the §341 meeting of creditor within 30 days of filing date. At the Debtor’s signing appoinment they are provided with document stating when 1st payment is due and then is also reminded via letter from office of Debtors’ Attorney when being notice of §341 meeting.

However, some cases just can’t get the funds together to pay the first payment on time, then case is dismissed. Chapter 13 Debtor still has options. The debtor can opt to have case reinstated and pay any amount due to the Trustee by hearing. The second option is to file new Chapter 13 case. The second options can be costly and will require an additional hearing the debtor(s) must attend.

It is crucial that Chapter 13 cases make their first payment to the Chapter 13 Trustee. This set a Good Faith standing with the Trustee office that the Debtor wants to succeed in the Chapter 13. Under New Reform law, all Chapter 13 case must be placed under Wage Order directive after the first payment is made. The Chapter 13 Trustee will require the Debtor(s) to complete this form at §341 meeting of creditors, if not already completed. This is more efficient way to assure higher chances of completing successful Chapter 13 case and reciept of discharge order.

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