Wage Order stop vs. Chapter 13 discharge

[GUYINA13]

I am trying to wrap my head around the process of the Chapter 13 Bankruptcy closing, so I don't lose my mind.

From what I gather on this site and others, the actual discharge of the Ch 13 can take several months from the final payment being made to complete the plan.

That part I get 100 percent - between paperwork and procedures, I know that stuff takes time.

What I am wondering about is for those of us that have had wage deductions set up at the start of their plan, that have been taking out bi-weekly payments for the last 5 years -- I am not understanding why the wage order wasn't stopped immediately after the final payment had been made.

Is the wage order a separate issue from the discharge process?

Per the trustee's own words, as soon as he receives final payment - the court will notify your employer of such and request that it cease from deducting any additional funds.

I made my final payment of the plan on June 24 - my plan base amount now matches what I have paid into the plan 100 percent.

I did notice that my final paycheck automatic garnishment has not yet been distributed to the creditors (Must've just missed the cut-off point) as at the end of each month for the past 5 years is when the trustee pays off each creditor.

Could that be the hold up on the wage deduction order being stopped, that doesn't seem right as again the trustee said when payment is received - wage order would be stopped, not when all monies have been distributed and audit has been done will wage order be stopped?

To sum up - I am OK waiting out the discharge for several months, but I would like to not keep taking hits every two weeks for no reason with money being sent to the trustee after my plan is already been paid.

And is the trustee going to keep taking his fee out of these post-bankruptcy payments he is getting? If so, that doesn't seem right at all.

[justbroke]

What I am wondering about is for those of us that have had wage deductions set up at the start of their plan, that have been taking out bi-weekly payments for the last 5 years -- I am not understanding why the wage order wasn't stopped immediately after the final payment had been made.

Is the wage order a separate issue from the discharge process?

From my horrible experience, it's neither automatic nor immediate and depends 100% on how your District and Chapter 13 Trustee deal with a wage deduction order (WDO). I had to file a motion to vacation wage deduction order in my case. Once I receive the order, I sent it to (faxed) my employer who stopped.

In some districts, the Chapter 13 Trustee's office automatically handles the WDO (both obtaining the original order, and getting the wage deductions to stop when the last payment is made). As such, I can't tell you how this is handled in your district, but you should be all on top of your attorney.

Could that be the hold up on the wage deduction order being stopped, that doesn't seem right as again the trustee said when payment is received - wage order would be stopped, not when all monies have been distributed and audit has been done will wage order be stopped?

The Trustee's distribution of funds has nothing to do with the WDO. As I wrote, it depends on how it works in your particular district on when the court issues an order ending the WDO. In my district, the attorney (which I was self-represented) had to file an (Emergency) motion to vacate the wage deduction order. I had more than $15K additional money taken from my check because I didn't understand the process.

The Trustee is not allowed to keep any "extra" money beyond what was in the original plan (e.g. 60 payments at a certain amount). Any excess funds must be refunded to the debtor. I had two refunds, one for $11,000 and another for another $5,700 in my fiasco. Mine, however, was self-inflicted.

Just make sure you are addressing how the WDO ends with your attorney.

[GUYINA13]

From my horrible experience, it's neither automatic nor immediate and depends 100% on how your District and Chapter 13 Trustee deal with a wage deduction order (WDO). I had to file a motion to vacation wage deduction order in my case. Once I receive the order, I sent it to (faxed) my employer who stopped.

In some districts, the Chapter 13 Trustee's office automatically handles the WDO (both obtaining the original order, and getting the wage deductions to stop when the last payment is made). As such, I can't tell you how this is handled in your district, but you should be all on top of your attorney.

The Trustee's distribution of funds has nothing to do with the WDO. As I wrote, it depends on how it works in your particular district on when the court issues an order ending the WDO. In my district, the attorney (which I was self-represented) had to file an (Emergency) motion to vacate the wage deduction order. I had more than $15K additional money taken from my check because I didn't understand the process.

The Trustee is not allowed to keep any "extra" money beyond what was in the original plan (e.g. 60 payments at a certain amount). Any excess funds must be refunded to the debtor. I had two refunds, one for $11,000 and another for another $5,700 in my fiasco. Mine, however, was self-inflicted.

Just make sure you are addressing how the WDO ends with your attorney.

Thanks for your input JustBroke!


My attorney says its the trustee whom will do that and the paperwork I got at the beginning of my case from the trustee says exactly this:

"Once my office has received all payments due under the terms of your confirmed plan, the court will notify your employer of such and request that it cease deducting additional funds from your wages." (a little later it states) "It has been my experience that quite often, it takes several paychecks before the information is processed and payroll deductions actually stop. If this happens, the additional monies received by my office will be refunded to you -usualy whitin 7 business days of the receipt of same."

So it sounds like the trustee is saying its on the court to notify the employer of the WDO stop, however, the court I would assume would need something from the trustee saying all payments have been made - (that is what I am confused about).

All payments have been made and I check Pacer daily - there have been no new documents submitted to the court since March concerning my case.

So the trustee (If I am understanding correctly) is saying the WDO could take some time because the info needs processed - but the trustee has to initiate the info to be processed by the court - in order for the WDO to be considered for being terminated.

So I am wondering what the trustee is waiting on, since as you point out it doesn't have to do with the final distribution of funds or anything like that.

By the way, I have attempted several calls to the trustee and its all automated, I get passed around to cases ending in number blah blah blah - and then once it goes to the right department it goes straight to voice mail and I leave messages and no one ever calls me back.

[justbroke]

Yes, the court needs the notice of completion of plan payments and requests the court to enter an order vacating the wage deduction order (WDO). If you have PACER and/or your attorney give you a copy of the order, you can expedite the cancellation of the deductions by directly forwarding the order to your payroll or legal department (however it's handled at your company). I faxed mine into our legal department and called to make sure they received it. I didn't want to wait another day for the mail!

The Chapter 13 Trustee will usually not talk to a debtor that is represented by an attorney. The Trustee's office can be difficult to reach unless you have a direct number for an individual that works there.

[GL57months]

Yes, the court needs the notice of completion of plan payments and requests the court to enter an order vacating the wage deduction order (WDO). If you have PACER and/or your attorney give you a copy of the order, you can expedite the cancellation of the deductions by directly forwarding the order to your payroll or legal department (however it's handled at your company). I faxed mine into our legal department and called to make sure they received it. I didn't want to wait another day for the mail!

The Chapter 13 Trustee will usually not talk to a debtor that is represented by an attorney. The Trustee's office can be difficult to reach unless you have a direct number for an individual that works there.

I was lucky then, as this was at the bottom of my cease payment email, from my Trustee, "If you have any questions, please feel free to contact me at extension 155."

[justbroke]

I was lucky then, as this was at the bottom of my cease payment email, from my Trustee, "If you have any questions, please feel free to contact me at extension 155."

Yes, you are lucky! Must be a decent Chapter 13 Trustee office. I had the email address of a staff attorney and she was rather nice.

[GUYINA13]

Yes, the court needs the notice of completion of plan payments and requests the court to enter an order vacating the wage deduction order (WDO). If you have PACER and/or your attorney give you a copy of the order, you can expedite the cancellation of the deductions by directly forwarding the order to your payroll or legal department (however it's handled at your company). I faxed mine into our legal department and called to make sure they received it. I didn't want to wait another day for the mail!

The Chapter 13 Trustee will usually not talk to a debtor that is represented by an attorney. The Trustee's office can be difficult to reach unless you have a direct number for an individual that works there.

Well I finally was able to talk to a real person at my trustee's office.

She explained, that in order for the wage order to be stopped, first my case needs reviewed "audited" to determine that everything is good to go and that the person in charge of doing that is currently on vacation until next week.

She said I could request through my attorney to compel the trustee to take action on the wage order.

I don't know if I should pursue that or not, to me the wage order thing shouldn't be treated the same as the discharge process.

Once I made final payment to them back in June, that should've been enough for the wage order to be stopped going forward.

Anyway you or anyone else, please chime in, do you think I should pursue having my lawyer compel the trustee to stop the wage deduction or just sit and wait for my case to eventually get reviewed by someone and then hope that they get around some day to the wage stop.

Getting paid every two weeks sucks, because they take out a good chunk each time

[Carmella]

It sounds like when the person comes back from vacation they will be moving on it?

In my case I was able to see on PACER when the order was filed. My attorney emailed me a copy ASAP so I could email it to my payroll people because that is FASTER than waiting on the trustee.

Perhaps when your Attorney is notified of the order he can email to you so you can get it to your payroll people right away. This allowed me to get it stopped just in time for my payroll closing/deadline. If it were a few days later I would have had one more deduction taken out and would be waiting for it refunded.

I have received two paychecks (every other week pay date) meanwhile the BK is not formally closed out, but they consider it discharged. I still don't quite understand that. I just know it's not 100% cased closed yet because it takes time.

[GUYINA13]

It sounds like when the person comes back from vacation they will be moving on it?

In my case I was able to see on PACER when the order was filed. My attorney emailed me a copy ASAP so I could email it to my payroll people because that is FASTER than waiting on the trustee.

Perhaps when your Attorney is notified of the order he can email to you so you can get it to your payroll people right away. This allowed me to get it stopped just in time for my payroll closing/deadline. If it were a few days later I would have had one more deduction taken out and would be waiting for it refunded.

I have received two paychecks (every other week pay date) meanwhile the BK is not formally closed out, but they consider it discharged. I still don't quite understand that. I just know it's not 100% cased closed yet because it takes time.

Thanks for replying Carmella,

I did have a lenghty conversation with my lawyer finally and I guess right before the trustee's lawyer went on vacation, she told him I need to fill out some compliance form before the closing procedures would begin.

So he sent me this Verification of Compliance with Debtor's Duties and Obligations form to fill out - but for the life of me I have no idea what this form is about - as it is asking me to verify that I didn't lie on my schedules or hide an inheritance or have any pending lawsuit awards coming my way.

Does anyone else have to fill out a form like this?

My lawyer said he is winging it because the normal paralegal who would handle these things is on maternity leave

To me I am wondering if the trustee's lawyer meant I needed to fill out a Certificate of Compliance (that mentions child support and things like that) that is the form I was expecting to get at the end of the bankruptcy.

Oh well, hopefully things get moving starting next week! Hopefully you will get official closure on your case as well, although the discharge sounds pretty good right now!!!

[brokenurse]

I’m still in limbo myself. All claims in NDC show a 0 balance and was paid at the end of July and I assume whatever audit needs to happen is still happening because my case is still active and my paychecks are still getting docked. The thing that I’m most annoyed about is the utter silence from my attorney. I’ve seen reference to the debtors obligation form but haven’t been sent anything to fill out. I also haven’t been given any news/guidance on when I’m taking over my mortgage payments since they were paid through the plan. This waiting is honestly worse than the end of my pregnancies