What is a Wage Order?

Some debtors either voluntarily or by suggestion of the Chapter 13 Standing Trustee choose a Wage Deduction as a more convenient way to fund their Chapter 13 Bankruptcy.  A Wage Deduction Order, signed by the Bankruptcy Judge, will be issued to your employer.  Your employer will then make your plan payments for you by deducting the total monthly payment from your pay and sending that money to the Trustee’s lockbox address.  This money will never be deducted in one lump sum.  Amounts will always be deducted in equal installments determined by the frequency of your pay schedules (i.e. bi-weekly, semi-monthly or weekly).

Debtor Responsibility: It is essential that you make direct payments to the Trustee’s lockbox until you actually see the plan payments being deducted from your paycheck.  It is also your responsibility to continue with the plan payments in the event there are missed days from your place of employment due to vacation, illness or termination.

Change of Job:  If you change jobs, notify your attorney and the Trustee’s office immediately.   This notification must be made in writing.  A new Wage Deduction order must be prepared and sent to the new employer.  If there is a delay between the time payments through your old employer cease and payments through your new employer begin, you are responsible for making direct payments to the Trustee.

Employer Responsibility:  It is a violation for an employer to discharge an employee or take any other disciplinary action because of a Wage Deduction Order.  Most employers have been very cooperative in assisting with payroll deductions for employees involved in Chapter 13 Bankruptcy.  If your employer has any questions or concerns with wage deductions, advise the Trustee’s Office and we will contact your employer.

Termination of Wage Order: 

When the Chapter 13 Plan has been completed or if the case is dismissed for any reason, a letter by the Trustee’s Office will be sent to the employer terminating the Wage Order Deduction.