There are several things that you should not do if you are considering filing for bankruptcy under either Chapter 7 or Chapter 13.  One of the things that people do which is a prohibited act is repaying a family member or a friend within a year of filing for bankruptcy.  This is known as a+ Read MoreThe post Is there anything I should not do if I’m thinking of filing for bankruptcy? appeared first on David M. Siegel.

By ARDEN DALE As offshore accounts draw greater scrutiny, some financial advisers are having their clients use a special trust as an alternative strategy to shield their assets from potential lawsuits.So far, 15 states allow the creation of domestic asset protection trusts, which safeguard securities or other assets of the owner. In the past, they weren't widely used and few states allowed them. One big driver of the trend is that offshore accounts--commonly used to ward off creditors--have grown less popular amid an ongoing Internal Revenue Service crackdown. The tax agency, which also contends the accounts help wealthy Americans evade taxes, has beefed up reporting requirements as well as penalties for violators. Increasingly, some advisers are having more discussions about domestic asset protection trusts as a matter of course with any client who owns a business, works in a high-risk profession like medicine, or worries that a child may wind up in a divorce. "We have been seeing a lot more of them," said Edward J. Mooney, managing director of BNY Mellon Wealth Management. Recently, Mr. Mooney raised the matter with a client who owns a shipping construction business in the energy sector. A boom in the fracking business, which carries the risk of liability over environmental damage, has prompted more use of the trusts, the adviser said. Anyone who wants to set up a domestic asset protection trust has to be prepared to work with a trustee in the state where the irrevocable trust is established. A client in Illinois, for example, can't set one up in his home state. So an adviser can help find the best state, and work to find a good trustee--usually a corporate trustee--to manage the trust there. Alaska, Delaware, Nevada, and South Dakota were early adopters of the trusts, and have been the most popular locations to site them. Illinois adviser Michael C. Foltz has been working with a client who is thinking about selling his electronic parts manufacturing business, but wants to keep his estate from having to pay state estate taxes on the proceeds. Mr. Foltz suggested a trust in a state with no state estate or income tax. He also broached the idea of setting up the trust to protect its contents from future creditors. "First and foremost, the estate planner is trying to find ways to reduce or eliminate estate tax, and if they can layer creditor protection on top of that, so much the better," said Mr. Foltz, a wealth manager at Balasa Dinverno Foltz LLC in Itasca, Ill., with about $2.1 billion under management. Robert J. Robes, an estate attorney with Greenberg Traurig in Boca Raton, Fla., said a domestic asset protection trust won't work for someone who sets it up in the face of an impending lawsuit. Instead, it must be in place well in advance of any litigation. "Be as proactive as you can," Mr. Robes said. "Oftentimes clients react to potential liability when something is starting to bubble up, which is too late." And don't put assets into the trust that are needed for the family to live on. Instead, think of it as a way to protect a nest egg, he said. Copyright 2013 Dow Jones & Company, Inc.  All rights reserved.

It is a much misunderstood truism that  a "secured creditor ‘with a loan secured by a lien on the assets of a debtor who becomes bankrupt before the loan is repaid may ignore the bankruptcy proceeding and look to the lien for satisfaction of the debt.'"     In re Howard, 972 F.2d 639, 641 (5th Cir. 1992).   Of course, the Bankruptcy Code does not say this.    In the case of a chapter 11 proceeding, what the Code does say is that  except as otherwise provided in the plan or in the order confirming the plan, after confirmation of the plan, the property dealt with by the plan is free and clear of all claims and interests of creditors, equity security holders and of general partners of the debtor.11 U.S.C. Sec. 1141(c).    Unfortunately, the courts in several circuits, including the Fifth Circuit, have added a judicial gloss to this clear statutory language and have held that in order for the provision to apply, that the creditor "must participate in the reorganization."    Elixir Industries v. City Bank & Trust Co. (In re Ahern Enterprises), 507 F.3d 817, 822 (5th Cir. 2007).     A new decision from the Fifth Circuit illustrates the perils of this rule.   Acceptance Loan Company, Incorporated v. S. White Transportation, Incorporated (Matter of S. White Transportation, Incorporated), No. 12-60648 (5th Cir. 8/5/13), which can be found here.What HappenedIn S. White Transportation, the creditor claimed a lien on the debtor's property and the debtor disputed the validity of the lien.   They had fought over the lien in state court without resolution.    When the debtor filed chapter 11, it scheduled the creditor as secured, but listed its claim as disputed.   The creditor did not file a proof of claim.   The confirmed plan acknowledged the lien dispute and provided for no distribution to the creditor.    The creditor did not object or vote upon the plan and it was confirmed.    After confirmation, the creditor requested a declaratory judgment that its lien had survived confirmation.   The Bankruptcy Court said no based on the rationale that notice and opportunity to participate was sufficient.   The District Court required actual participation and reversed.    The Fifth Circuit, relying on Black's Law Dictionary on rulings from other circuits, said that participation must be active to be effective.    The Court held:In light of our interpretation of the definition of the word “participate” and in accordance with the above-cited persuasive authority from our sister circuits, we hold that meeting the participation requirement in In re Ahern Enterprises requires more than mere passive receipt of effective notice.Opinion at p. 5.Judicial Gloss The difficulty with this decision is that the judicial gloss overshadows the statutory language.    The Code says that "property dealt with by the plan is free and clear of all claims and interests."    The Code does not that "property dealt with by a plan is free and clear of all liens and interests of parties who actively participated in the bankruptcy case."    Espinosa and Due ProcessDue process requires that a party receive notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 272 (2010), quoting Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950).  Clearly the creditor here received notice which satisfied the requirements of due process.The Fifth Circuit brushed Espinosa in a footnote, stating that it was a case about a motion for relief from judgment under Rule 60(b).    However, Espinosa was about more than simply Rule 60(b)--it was about the binding effect of a plan.    In Espinosa the creditor argued that the Court lacked the power to discharge its otherwise nondischargeable claim in a plan and was rebuffed.   In this case, the creditor argued that the Court lacked the power to avoid its lien and was validated.   Something is clearly amiss here.Practical Problems and Reductio Ad Absurdum The S. White decision also presents practical difficulties.   If a creditor alleges a lien, no matter how spurious, and does not file a claim, does this exempt the creditor from the bankruptcy process?     The Bankruptcy Rules allow the debtor to file a claim on a creditor's behalf which the debtor could object to.   However, if the creditor remains silent in response to the claims objection, then it still has not actively participated in the case.    The debtor could file an adversary proceeding to determine the lien's validity.   This would delay the bankruptcy and no doubt lead to criticism from the U.S. Trustee.   On the other hand, if the debtor files an adversary proceeding and obtains a default judgment, then the creditor still has not actively participated.   While it is true that an adversary proceeding provides the creditor with more more due process, the requirements of due process had already been met.   The problem with judicial creations such as this one is that they have the prospect of taking on a life of their own.   The reductio ab absurdum here is that if the active participation principle is taken to its extreme then every creditor could opt out of the chapter 11 process by not participating and a chapter 11 plan would be a worthless scrap of paper.     The Need for Rehearing En BancIt is time for the Fifth Circuit to reconsider the active participation rule.    This judicial gloss is inconsistent wit the language of the Code and is contrary to Supreme Court precedent.   It encourages a creditor who knows that its lien is being challenged to remain silent and hide behind the log to the detriment of the debtor and its other creditors.   In S. White, there were three other creditors who held undisputed liens upon the same property.    These creditors had the right to rely upon the terms of the plan and should not be subordinated to the claim of a creditor who sought to subvert the process through its silence.    

Who would have thought that abstention could be so interesting? Judge Leif Clark has written an opinion on abstention which jabs at some of the boilerplate language found in motions to abstain and contains a footnote destined to become a Clark-classic. The Official Committee of Unsecured Creditors of Schlotzsky's, Inc. v. Grant Thornton, LLP, Adv. No. 05-5109, 2006 Bankr. LEXIS 2435 (Bankr. W.D. Tex. 8/30/06), which can be found here.In the Grant Thornton case, the creditors' committee received permission to sue the debtor's auditors. They brought seven causes of action, five of which arose under state law. Grant Thornton responded with a motion to abstain from hearing the state law claims and a motion to dismiss. In denying the motion to abstain, Judge Clark resisted the temptation to check off factors on a multi-prong test. In fact, he questioned the usefulness of such tests in general. He stated: Many courts, in an effort to give expression to the parameters of that (equitable) discretion, have developed multi-factor tests. While helpful, they are by their very nature, not dispositive. Mechanical applications of such tests to rule on equitable issues that are heavily fact-specific are often doomed to produce incorrect outcomes. The various tests offered by these opinions must be viewed in the larger context of the task presented--to arrive at the equitable application of the permissive abstention doctrine, as appropriately applied in the bankruptcy context. Or, more simply, we must avoid losing the forest for the trees.Slip Op. at 5.Judge Clark illustrated his point in a footnote which only he could have written.A person is sent into a crowded room with directions to find Judge Clark by applying the following multi-factor test: (1) tall, (2) blond hair, (3) angular features, (4) dressed stylishly and (5) having a resonant voice. The person returns with David Bowie in tow. If the person had simply been given a recent picture of Judge Clark (which would have been worth far more than all the factors one could write down on a piece of paper), chances are he would have quickly returned with the judge, not the singer.Leif M. ClarkNot Leif ClarkNot Leif Clark Unless, of course, Judge Tony Davis was in the room, in which case the searcher might come back with two jurists. Instead, Judge Clark tried to identify the larger policies served the abstention doctrine, stating:The larger context of permissive abstention is informed by the base principles that led to its inclusion in the bankruptcy jurisdiction statute in 1978. Those principles included the importance of centralized administration in one forum, the breadth of bankruptcy jurisdiction intended to have been conferred, the need to deal with unexpected exigencies or to step back when the matter to be litigated is especially important to be resolved in a state forum, and the need to do justice (as well as to avoid doing an injustice).Slip Op. at 5.In the discussion which followed, Judge Clark addressed some of the boilerplate allegations which turn up in most motions to abstain:* Forum Shopping* State Law Issues* Non-Core StatusWith regard to forum shopping, Judge Clark pointed out that all parties with a choice of venue engage in forum shopping. The pertinent question is whether the particular exercize of forum shopping is abusive or consistent with the jurisdictional provisions of the Bankruptcy Code. In this case, the presumption in favor of centralizing proceedings related to the bankruptcy case in the Bankruptcy Court won out.With regard to the prevalence of state law issues, Judge Clark pointed out many of the issues which the bankruptcy court deals with a daily basis, such as property of the estate, allowance of claims, determination of exemptions, validity and priority of liens, avoidance actions brought under section 544(b) and questions concerning the enforceability of executory contracts, all arise under state law. Judge Clark had previously ruled upon a case involving professional liability. Therefore, the mere presence of questions of state law was not dispositive.With regard to non-core status, Judge Clark pointed out that this should really be a non-factor, since bankruptcy courts are expressly given the authority to hear non-core proceedings in the jurisdictional scheme of title 28. "Unless we are to read Congress' own enactment of section 157(c)(1) of title 28 as a perverse sort of statutory self-fulfilling prophesy, that section's operation should not factor into the abstention calculus." Slip Op. at 9. Properly understood, non-core status is a prerequisite to asking the abstention question. However, beyond that, it is not independently important.At the end of the day, Judge Clark found that abstention was not appropriate.It is refreshing to see Judge Clark take on some of the dogma surrounding abstention doctrine. So many of the opinions about abstention (and the briefs citing those same opinions) are long and self-important. However, abstention is really just about whether a particular choice of forum would be unfair. Although he did not use this specific formulation, his concept of not losing the forest amongst the trees could be summed up in two questions (which are arguably a multi-factor test themselves, but are certainly more direct and to the point):(1) Is the Plaintiff trying to obtain an unfair advantage by its choice of forum?(2) Is the Defendant being unfairly prejudiced by the choice of forum?The answers to those questions should generally result in an answer as reliable as the multi-pronged tests.(Note: In fairness to the promulgators of multi-factor tests, this approach is at least implied by the statute, which lists the interest of justice, comity with state courts and respect for state law as factors to be considered).

The very first thing you need to do before filing for Chapter 13 is to meet with an experienced attorney in your area to talk about your case. Most attorneys will have a bankruptcy questionnaire which you will fill out in advance or at your meeting. The questionnaire is a detailed listing of all of+ Read MoreThe post What do I need to do before filing for Chapter 13? appeared first on David M. Siegel.

Here at Shenwick & Associates, our summer is busy with (among other matters), representing clients in adversary proceedings. An adversary proceeding is a lawsuit that is brought within a bankruptcy proceeding and based on conflicting claims, usually between the debtor (or the bankruptcy trustee) and a creditor or other interested party. Adversary proceedings are governed by special procedural rules under Part VII of the Federal Rules of Bankruptcy Procedure.Typically, an adversary proceeding is commenced when a business files for reorganization under Chapter 11 of the Bankruptcy Code, and then the case is voluntarily or involuntarily converted to a liquidation under Chapter 7 of the Bankruptcy Code. A Chapter 7 bankruptcy trustee is then appointed. Under § 546(a) of the Bankruptcy Code, the bankruptcy trustee has until the earlier of: (1) the later of two years after the entry of the order for relief, or one year after the appointment or election of the first trustee if the appointment or election occurs before the expiration of the two year period after the entry of the order for relief, or (2) the time the case is closed or dismissed, to commence an adversary proceeding.Typically, the claims a trustee makes against a defendant in an adversary proceeding are for fraudulent transfers (transfers of the debtor's assets to a third party, with the intent to prevent creditors from reaching the assets to satisfy their claims) under § 548 of the Bankruptcy Code and state law (i.e. New York Debtor and Creditor Law, which has a six year statute of limitations) and preferential transfers (transfers made prior to a bankruptcy filing to a creditor by a debtor to the exclusion or detriment of its other creditors) under § 547 of the Bankruptcy Code and state law. A trustee will usually send the defendant a demand letter for recovery of the debtor's assets to voluntarily settle the claims before filing a complaint and commencing the adversary proceeding.Adversary proceedings are highly specialized in both their procedural rules and the analysis of the merits of the substantive claims for relief against a creditor or other party. If you're involved in bankruptcy litigation or think you may be (i.e. one of your vendors appears to be having financial difficulty), please contact Jim Shenwick.

By C. J. HUGHES To understand how the current office market for technology companies can resemble a Russian nesting doll, with layer upon layer of increasingly smaller subleases, it might help to consider the upper stories of 568 Broadway in SoHo. In the cast-iron former sewing factory, Scholastic, the publisher, is subletting two floors of space to Foursquare, a social media company. In turn, Foursquare is subletting one of those floors to a handful of other tech firms, including Fueled, which designs apps for phones. And Fueled has divided its column-lined room as a co-working space, where $650 a month gets a renter a seat and unlimited snacks from jars along a wall. One of those seats belongs to David Spiro, a self-employed entrepreneur, who sat alone at the corner of a long table on a recent afternoon, a bag of popcorn by his laptop. “I’ve raised some funding,” Mr. Spiro said, “but not nearly enough to afford a typical lease in Manhattan, so this place is great.” The sentiment could also apply to the daisy chain of tenants in his building, and more broadly to the surrounding neighborhoods. In the last few months, the area of Manhattan south of Midtown has been awash in deals where early-stage tech companies have opted to take over office space belonging to another tenant, rather than enter into a direct lease with a landlord. These sublet deals are often preferred, tenants and brokers say, because the rents are usually slightly cheaper than conventional leases. They can also be for shorter lengths of time than the typical 10 years and require a far smaller security deposit up front. As important, they say, is that the spaces usually come built out, which means essentials like high-speed Internet lines, air-conditioning and conference rooms are already in place. Getting up and running quickly is critical for companies or self-starters that often measure growth in months, not years, analysts explain. Of course, the office within an office within an office can carry risks. If the first, second or third tenant goes bankrupt, a subletter could find itself without a home. But because their own leases are so brief, these low-rung tenants can also easily wind down operations quickly if, say, their app never catches fire. “They don’t know about the future, so flexibility is key,” said Heidi Learner, the chief economist at Studley, the commercial real estate firm, who is the co-author of a report on the tech sublet trend. “You don’t know about what head count will be, whether you will get any venture capital funding, or whether you will be acquired.” In general, subletting is becoming more popular. In the Midtown South area, or from Canal Street to 30th Street, sublets accounted for 19 percent of major leasing activity this year, up from 11 percent in 2010, Studley said. And between January and April of this year, 33 percent of all the leases signed in Manhattan by tech companies — a major driver of the current economy — were sublets, the report said. Sublet tenants among other industries within the same period were less than half that. The report also states that the average length of tech subleases is about four years. Not just any space will do; tech firms almost exclusively want prewar buildings with lofty ceilings and open floors, said Sean Black, a broker with Jones Lang LaSalle. Since that type of converted industrial space is clustered mainly around the Broadway corridor, supply is limited, he added, and demand is robust. “They like the ‘old world meets new world’ look,” said Mr. Black, whose many tech clients include Foursquare. A lack of walls and cubicles, with eclectic art on the walls, embodies a certain attitude. “The last thing they want to do is conform with corporate America.” Technology firms have been subletting a bit more space than they personally need, reflecting awareness of heightened demand from a flourishing industry that allows them to rent out extra room to similar companies. Besides, locking in the space at today’s asking rents, which for sublets is about $45 a square foot in Midtown South, according to Studley, is considered wise, because rents are expected to climb, companies say. “It’s a great way to hedge the lease,” said Derek Stewart, who handled leasing for Foursquare before leaving the company this summer. Foursquare, which has 120 employees in New York, paid about $45 a square foot in 2011 in a seven-year deal, Mr. Stewart said. But he estimated that with companies like ZocDoc, a physician app service, and Thrillist, a lifestyle site for men, under the same roof, the building had gained a bit of buzz as a popular tech address. That means the space could command $55 a foot today, he said. But so far there has been little urge to profit off the subtenants, he added, saying that Fueled and the other subtenants also pay about $45 a foot for their space. “We felt kind of badly making money off it,” Mr. Stewart said. “We didn’t want to have a bad name in this tight community.” Mr. Stewart, who now works for David Tisch, a tech investor, also pointed out that subleases were essential for the survival of the tech community. In San Francisco, where Mr. Stewart leased two spaces on behalf of tech companies, start-ups can afford direct leases, which often require just three months of rent for a security deposit. But in New York, 12 months of rent is common. “Landlords here are just so risk-averse,” he said. In a business where a company’s start-up phase can be hypercompressed — Instagram was founded in 2010 and bought by Facebook for $1 billion two year later — short sublets are not unusual. The news site BuzzFeed, for example, has signed a two-year sublease for space in the new headquarters of Tiffany & Company at 200 Fifth Avenue, across from Madison Square Park. BuzzFeed, which had been based on West 21st Street in a 20,000-square-foot space, will take an entire 58,000-square-foot floor, which is one of seven floors Tiffany has there. The rent was not disclosed, but Greg B. Taubin, the Studley broker who represented Tiffany, said that comparable sublet space in the area went for $65 a square foot.  “Companies like this don’t sign long-term leases because they don’t have a crystal ball,” Mr. Taubin said. But for Tiffany, which doesn’t need the space immediately, there’s an upside in cost reduction, too, he added. Other advantages include having lights on and more people in the elevators, said Bonnie Shapiro, the director of leasing for Allied Partners, an owner of 568 Broadway. “You don’t want tenants touring the building and seeing dark, unused spaces,” she said. For tenants that may be consolidating or downsizing, the new demand for sublet space may come at a fortunate time. Credit Suisse, the investment bank, which has undergone several rounds of layoffs in recent months, has managed to sublet all its former office space at 315 Park Avenue South, one of three locations it has in Manhattan. Tech subletters in the 20-story Beaux-Arts tower, which is at East 23rd Street, include VaynerMedia, X+1 and Responsys, as well as Adap. TV, which this month took the entire seventh floor measuring 16,000 square feet. The new space features a red wall decorated with words like energy, creativity and passion, and executive offices around the perimeter have been turned into shared conference rooms. The space is a far cry from its cramped, plain-jane 4,000-square-foot space at 915 Broadway, said Gerry Manolatos, the communications director for Adap. TV. Mr. Manolatos would not disclose the terms of his lease, only that it is for less than a decade. But in the merry-go-round of the tech sublet market, Adap. TV is cashing in itself; its former space on Broadway is also being sublet to a tech firm, he said. “It’s like one deal leads to the next,” Mr. Manolatos said. “Everybody’s thinking, ‘Who knows where we will end up next?’ ” Copyright 2013 The New York Times Company.  All rights reserved.

Can I leave some creditors off of my bankruptcy?No. Any creditor whom you owe a balance to must be listed on the petition. Does this mean you should go pay off all the credit cards that you want to keep?No. Even with a $0.00 balance the credit card companies will likely close your accounts once you file bankruptcy. Some creditors WILL let you keep your account but even if this is the case, you do not want to pay off any large balances right before filing for bankruptcy. If any creditor receives more than $600 in the 90 days prior to filing it is considered a preferential treatment, meaning that the trustee can request the money back from the creditor.I owe $1000 to my Dad (any family member or friend). Can I pay him back right before I file bankruptcy?No. As stated above, if you owe money to someone they are a creditor. The trustee and the Bankruptcy Court do not allow preferential payments. They do not like to see you pay Dad back, but not Visa for example. For this reason, any payments made to family members or friends in the past year before filing must be listed on the petition. You certainly do not want the trustee contact Dad to get the money back that you paid to him.Does this mean I can never pay my Dad, or any family member or friend, back the money that I borrowed? No. The bankruptcy wipes out your LEGAL liability to the creditors. However, you can choose to make VOLUNTARY payments to certain creditors if you chose. Keep in mind this cannot be done until the bankruptcy case is closed.  I owe my Doctor money. Does this mean that I have to change doctors? No. Similar to the voluntary payment to Dad described above, you can make voluntary payments to the doctor if they are requiring payment before using their services again. However, you will want to check with the doctor before making payments. A lot of times, they will wipe of your balance before the bankruptcy and let you start fresh with a new account. 

What happens if I get behind on mortgage payments while I am in a Chapter 13?You made the decision to file a bankruptcy and decided to keep you home. You file a Chapter 13 and are making your mortgage payments and your Chapter 13 plan payments as scheduled. Something comes up and you get several months behind on the post-petition mortgage payments. Now what? Several things will happen…First is that the attorney for the mortgage company will likely contact your attorney let you know that payments are delinquent. If this happens, the attorney should contact you advising you that payments needs to be brought current. However, this step of a “warning” from the mortgage company is not required and does not always happen.The next step (often times the first step), is that the mortgage company’s attorney will file a Motion for Relief with the court in your bankruptcy case. Essentially this is the mortgage company bringing notice to the court that you are delinquent on post-petition payments on your mortgage. They are also asking the court to grant the mortgage company relief from the automatic stay. In short, the mortgage company wants permission to be able to continue with a foreclosure process even though you are in a bankruptcy due to being delinquent.The motion for relief will set out a hearing date. 7 days prior to that hearing date a response must be filed by you or your attorney (if you are represented) stating your intentions, whether you intend to become current on the mortgage, etc. If not response is filed, the motion for relief will automatically be granted to the mortgage company 7 days before the hearing.Options1. Become Current: Respond to the motion and become current on post-petition mortgage payments before the hearing2. Stipulation Agreement: Depending on how far behind you are on your mortgage, you can ask the mortgage company to allow you to enter into a stipulation agreement. This stipulation agreement usually requires some sort of down payment and spread the delinquent post-petition mortgage payments out over 6 months. This may sound like a great option, however, be aware that you now have 1) ongoing mortgage payments, 2) chapter 13 plan payments, and 3) a stipulation payment.3. Surrender the home: If at this point you realize you cannot maintain payments on the mortgage, you can allow the Motion for Relief to be granted and surrender the home through the bankruptcy. The decision to file bankruptcy and the decisions related to any motion for relief in a bankruptcy are important and should not be made based on this article. You should seek legal advice before making a decision. 

What is a wage order and what are the benefits?A wage order in a Chapter 13 is where a portion of your Chapter 13 plan payment is automatically deducted from your paycheck by your employer. Your employer then sends the money directly to the trustee.If you are paid bi-weekly then the monthly payment will be prorated. For example, if your Chapter 13 plan payment is $300 then $138.46 would be taken out of each paycheck.Benefits to wage order:                                       Presumed current if less than 10 days lateNo paying entire payment out of one paycheckPayments guaranteed to be made (so long as your employer is following the order)You are not tempted to spend the money elsewhereAllows for an overall successful completion of a Chapter 13 planIn Illinois, wage orders are required where the Debtor is employed. In Missouri, while it is not required, it is strongly recommended as is ensures payments will be made to the trustee on a regular basis.What are your payment options if you do not have a wage order?Payments can be made in the form of a cashier’s check or money order and mailed to the trustee. You can also set up for an official bank check to be sent on a monthly basis directly to the trustee. They will NOT however accept a personal check from you.To avoid incurring the fees of a money order on a monthly basis for your entire Chapter 13, talk to your attorney about setting up a wage order for you.