<h2>Bankruptcy Attorney Details What Payments Should Be Made And When Payments Should Be Made In A NJ. Chapter 13 Case.</h2>
Based on the fact that each debtor’s circumstances are different, please note that the following information is based on my opinions of the “typical” debtor’s circumstances regarding how and when payments should be made in a New Jersey chapter 13 bankruptcy case. The following may not comply with your specific circumstances. Each debtor must ensure that certain creditors are paid on a monthly basis.
Unsecured creditors, such as credit card debt and personal loans are not paid directly. Secured loans, such as mortgages and auto loans, in connection with real estate and autos, that the debtor wishes to keep, must be paid, in some fashion. Also, typically, utilities, in connection with a house that will be kept, must be paid directly, on a timely basis. Specific services, that one wishes to maintain, such as a cell phone and cable, must be paid on a timely basis, as well.
Each month a debtor must make a chapter 13 payment to the trustee. The bankruptcy hearing date, has no effect or relation to when and how a trustee payment is made. Although the first trustee payment is actually due thirty (30) days after the bankruptcy filing, the trustees request that the plan reflect that the first payment is due on the first of the month after the filing. Also, the plan must reflect that all subsequent payments be made on the first of the month thereafter. Based on my experience, it is acceptable to make the first payment within thirty (30) days of the filing, and to make all future payments, within thirty (30) day increments, thereafter. My other blogs explain where and how the payments should be made.
The other payments that must be paid are based on the specific circumstances of the debtor. If the debtor has a mortgage, than the mortgage payments must be paid, each month, on a timely basis. After the bankruptcy filing, the first mortgage payment is due to the mortgage company, when the payment initially comes due after the bankruptcy filing. In other words, if a debtor files his bankruptcy case on the 20th of the month and his regular mortgage payment is due on the first of each month, than the initial post filing mortgage payment must be paid by the first of the month after the filing date.
If a debtor is required to make a regular payment directly to an auto finance or lease company, than the payment must be paid to such company, each month, until the debt is satisfied. Similar to the mortgage payment, the initial post filing auto finance (lease) payment must be paid when the payment initially comes due after the filing. An auto finance or lease payment may come due on any day of the month, unlike a mortgage payment, which is typically due on the first of each month. A particular debtor’s plan may require that the auto finance or lease payments be paid through the trustee payments, Under this scenario, the debtor need not make the monthly auto payments directly to the creditor.
Robert Manchel may be contacted at 866 503 5644 to discuss your questions concerning bankruptcy in NJ.