After filing for chapter 13 in Valdosta, the person pays back the debts over three to five years. Each month, this individual makes one payment that a trustee distributes to the creditors. Usually, the payment arrangement is set up as a payroll deduction. This helps to ensure that no payments are missed or late, which can cause the program to default.
Payroll Deductions
Some districts require all or nearly all people approved for the program to have their payments set up as payroll deductions. A person filing for Chapter 13 in Valdosta may feel strongly encouraged to do this, although there are other options. For instance, an online payment system makes the process convenient for participants.
Some individuals consider payroll deductions like this to be intrusive and a violation of their privacy. They may not want people in the human resources or payroll departments knowing that they filed for bankruptcy. These days, most newspapers no longer publish bankruptcy filings in their public records sections, so it is easier to keep participation a secret.
Deduction vs. Garnishment
Legally, payroll deduction for Chapter 13 payments is not considered wage garnishment. Garnishment carries a certain stigma, indicating the person has not been paying his or her financial obligations. This arrangement, in contrast, is a repayment program legally considered a court-ordered deduction and not a garnishment.
If the person does reluctantly agree to the payroll deduction, understanding this distinction may make it easier to accept. Speaking with the employee who will be setting up the deduction is advisable before he or she receives the court order.
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