Success in Chapter 13: What You Need to Know

You want to be one of three consumers who succeed in Chapter 13.  As the lawyer in over a thousand successful Chapter 13 cases, I’ve collected tips for success in Chapter 13.

The Chapter 13 Trustee in Northern Virginia is Thomas Gorman

When you file Chapter 13 bankruptcy in Alexandria Virginia, you make payments to the Chapter 13 Trustee, Thomas Gorman. But you do NOT send them to his Alexandria address.  There’s a bank in Memphis that handles Chapter 13 payments for most of the bankruptcy courts in the country.  You send your payment to:

                                               Thomas Gorman, Trustee 
                                               P.O. Box 1553 
                                               Memphis, TN 38101-1553

Be sure to put your case number on your check. Make the check payable to Thomas Gorman, Trustee.

I have a lot more info on Chapter 13 Trustee Thomas Gorman, here.  PS, His physical address is 1414 Prince Street, Suite 202, Alexandria VA.  You should never have to go there.

Do Not Bounce Your Trustee Payments

If you bounce a payment to Trustee Gorman, the first time he yells at me. The second time he complains to the Judge. At that point you need to send money orders every month for the rest of your case.

Getting money order each month is a huge time waster. So please do NOT send your trustee payments until you know you have money in the bank to cover it. Do NOT send the money hoping you can cover it when the mail arrives.  It’s better (after your first payment) to pay late than to bounce a check.

Personally, I like Online Bill Pay

My bank has a bill pay system. Basically bill pay means the bank mails out your checks for you.  I use it to pay Dominion Power and send my weekly contribution to my church. I suggest using bill pay in Chapter 13 to mail your monthly payments to Trustee Gorman.  That way, you don’t have to find an envelope and a stamp.

If a check gets lost in the mail (I’m personally guessing about out of every five hundred) there’s at least evidence that you mailed it.  Also, if you use bill pay you can determine how many trustee payments you made, when they were mailed, and when they were cashed.

If you already use bill pay for some of your bills, be sure to use it for the trustee payments. If you don’t use it already, at least give it some thought.

Pay Your Mortgage On Time

Did you file Chapter 13 to protect your house? Then make your house payment on time.

Each month you are in Chapter 13, besides making your payment to the Chapter 13 trustee, you need to make your mortgage (or rent) payment. If you get in a short-term jam and are slipping behind–tell me!–but make the house payment first.

Here’s why. If you get thrown out of Chapter 13, you are out of Chapter 13.  If you get thrown out of the house, you are out of your house.  I explain more about that, here.

When you file your case, the mortgage company will shut off your auto draft and your payment portal. Use your bill pay to have your bank mail them a check.

Please do NOT send partial payments

Sending partial payments tangles up your mortgage company’s accounting.  And it tangles up yours, too.  They don’t know what to do with a partial payment or where to apply it in your account or on your bill.  Sooner or later–we hope sooner–you’ll have enough money to send enough to catch up. You’ll think you are current, but they now have two partial payments parked who-knows-where.

If you are confused and the mortgage company is confused, the judge will be confused to if we ask her to straighten it out.  Pay late if you have to–and tell me please–but do NOT send partial payments.

Again, I like Online Bill Pay for Chapter 13

If there’s a question later about missed mortgage payments, looking at your bill pay make is fairly easy to count the number of payments you’ve made.  Much easier than if you have to go through cancelled checks.  If you are in a five year Chapter 13 (most homeowners are in five year plans) you’ll need to make 60 mortgage payments over those five years.  Your bill pay should show if you’ve made twelve payments in the last twelve months, or if you’ve missed one.

Set up a system so you can tell quickly and easily how many mortgage payments you’ve made since your bankrutpcy case started.

If you have a Personal Injury During Chapter 13

If you have a car accident or other personal injury during your Chapter 13, tell me.  I explain why here.

Talk to me early, so we can do planning

Here’s one example of how early planning can help with your Chapter 13 means test and Chapter 13 budget.