The Bankruptcy Wage Directive Explained...

July 7, 2010 - PRLog -- Under the current bankruptcy law all Debtors who receive a regular pay check must be under a wage directive. Many Debtors are not happy about being forced to be under the wage directive, but it is required unless there is a good reason, such as loss of job. A motion must be filed to allow the Judge to decide if the reason is valid or not.

There are benefits to being under a wage directive for the Debtors. One very important benefit and the reason Congress required them is that the Debtor will not miss payments. However, it is still the responsibility of the Debtor to make sure the Trustee payments are being taken out of his or her paycheck. If the payments are not being taken out of the paycheck for whatever reason; they haven’t started yet, the employer isn’t withholding the money, problems with payroll, etc, it is still the responsibility of the Debtor to get those payments in.

I had a case in which the Debtor’s employer messed up and didn’t send in a payment for 3 months. The Debtor never made a payment. The problem with his payroll was fixed, but he was still behind 3 payments. Even though he was making all of his payments after that gap, the Trustee filed a notice of intent to dismiss for failure to make Trustee payments. We explained to the Debtor that he needed to get current and that is was still his responsibility to make sure the payments were being made. The Debtor never got current on his Trustee payment current and his case was dismissed.

Another benefit to having the money taken out of your paycheck is that you don’t have to mail in the payment yourself. The Trustee does not accept personal checks, but only cashier’s checks or money orders. For people that are used to paying all their bills either by check or online, it can be a major inconvenience to have to go to the bank and get a cashier’s check every month.

Being under a wage directive is not the worst thing that can happen. Some people really enjoy knowing the money is taken out before they even see it. The reason most people don’t want to be under a wage directive is that they either don’t want people at work to know they filed bankruptcy, or they don’t like to give up control of their expenses. Again, it is something most Debtors will have to accept, because the law requires that you be under the wage directive.

For more information please visit http://www.bankrupcy-alternative.com/after-judgement.html or call us directly. Here is another bankruptcy article http://www.prlog.org/10782489-bankruptcy-notice-of-termin... for your reading enjoyment.

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