Monday, November 18, 2013

Oregon Chapter 13 "Wage Order"

In all Chapter 13 cases a monthly payment is made by the Debtor to a Trustee. The Trustee distributes this payment to the Debtor's creditors.  All debtors who file chapter 13 in Oregon will hear about a "wage order".  This term refers to how payments get from the Debtor to the Chapter 13 Trustee. It is essentially a wage withholding from the Debtor's job, similar to a garnishment.

The great thing about a wage order is that the Debtor doesn't need to mail out a check every paycheck or every month to the Trustee. It is automatically taken from the Debtor's check and mailed by his or her employer directly to the Trustee.

It is critical that when a debtor is on a wage order they look at every paystub to make sure that the payment has come out of their paycheck.  If an employer messes up and fails to deduct and send a payment it is ultimately the Debtor's responsibility to still make the payment.

The Trustee and Court in Chapter 13 generally will require that a wage order be put in place. The chances of a chapter 13 plan succeeding greatly improve for Debtors on wage orders.  Although they used to be 100% optional, the Court began making these mandatory unless a Debtor has a very good reason why their employer can't know. A good chapter 13 attorney should be able to tell you if the Trustee and Court is likely to grant a waiver of the wage order in your case depending on the facts.

For more information feel free to visit our bankruptcy law site.