Chapter 13 bankruptcy cases are fraught with traps. In fact, statistics show that only one in three cases ends with a discharge. This high failure rate is attributable to many causes, but a Chapter 13 debtor can increase his or her chances for attaining a discharge by following one simple rule: pay the trustee.

When do I start paying the trustee?

The Chapter 13 debtor must pay the trustee the amount proposed in the repayment plan not later than 30 days after the bankruptcy case is filed. Section 1326(a)(1) of the Bankruptcy Code states:

Unless the court orders otherwise, the debtor shall commence making payments not later than 30 days after the date of the filing of the plan or the order for relief, whichever is earlier, in the amount— (A) proposed by the plan to the trustee;

How much do I pay the trustee?

The trustee is paid the amount stated in your proposed Chapter 13 plan. You continue to make this payment each month until the plan is amended by order of the bankruptcy court.

My plan hasn’t been confirmed by the bankruptcy court. Why do I pay the trustee if he cannot pay my creditors?

The trustee will hold onto your plan payments until your plan is confirmed. At that time he will distribute money to creditors who have filed claims that are allowed by the bankruptcy court. While the details of payments to creditors takes a little while to sort out in your case, the most important thing for you to do is pay the trustee.

I have executed a request for wage withholding, but my employer says that it will be several weeks before it will start.

There is no exception in Section 1326 for wage withholding orders. It is your responsibility to ensure that the first plan payment is made, not your employer’s. The bankruptcy court and trustee expect your first payment to arrive within 30 days of the case filing, or a motion to dismiss will be filed in your case. If your employer cannot deliver payment to the trustee on time, you must make arrangements to pay the first payment yourself.