As a Hometown bankruptcy attorney, I can tell you that the more successful Chapter 13 bankruptcy cases are cases where the debtor is making the trustee payment directly out of his wages. This is known as a payroll control order and the employer is ordered to pay the Chapter 13 plan payment out of the wages. Now, this could be monthly, it could be biweekly, it could be weekly; it depends on how often that debtor is paid. What I like to do is have every debtor who is working sign up for payroll control and have the bankruptcy Chapter 13 payment deducted directly out of their check. What this does is it eliminates the trustee having to bring a Motion to Dismiss for failure to make a timely plan payment.
What it does open up, though, is the possibility that the debtor will not make the post-petition mortgage payment because the amount to make the mortgage payment is simply unavailable based on the way the debtor is budgeting after filing. We know that the trustee is being taken care of because that’s coming directly out of the check. But what is left out of the check, that is the amount that the debtor must budget and appropriate properly. If the debtor decides that they are going to have a nice Christmas and they are not going to make their regular mortgage payments because they want a bigger Christmas, they are going to have a problem. If a debtor decides that he wants to take a weekend up in Wisconsin as opposed to paying his mortgage payment on time, he’s going to have a problem. It’s not necessarily that the debtor can’t make the payment, if the debtor chooses not to buy the fact that they are misappropriating the funds that have been earmarked towards the mortgage payment. After you claim bankruptcy, you have to make smart choices with regard to your spending.
So Chapter 13 is a very difficult Chapter and for that reason, many attorneys do not practice Chapter 13 bankruptcy law. There are many attorneys that will only do a Chapter 7 bankruptcy case and have decided that Chapter 13 is just too much work. There are others attorneys like myself who practice both Chapter 7 bankruptcy and Chapter 13 bankruptcy. I feel it’s important as an attorney to have a comprehensive background in bankruptcy law. I want to be able to help any individual who comes to see me, whether it be for a fresh start or for a bill reorganization through a Chapter 13. I want to be able to analyze their income and their expenses, their assets and their liabilities and to give solid bankruptcy advice on whether or not Chapter 7 is a good idea or whether or not Chapter 13 is a good idea.