What if Company doesn't pay trustee

[dovette7]

Ch 13 payment has been taken out of husbands check. His company holds it each week then makes one payment to Trustee's office each month. My husband left this company and they still have 5 weeks worth of Trustee payments they have held but not paid at this point.

so to my surprise, Pacer shows that Trustee filed Motion to Dismiss our case b/c payment was late. Once they receive the 5 weeks of payments, we will be ahead on payments.

called Attorney and she said find out from company how much they have and are sending, she will get with trustee, and all should be well. Well, I can't get the company to email me with the information and I think they are stalling. I have all the checkstubs along with all payments made to trustee on spreadsheet showing the company hasn't paid, not us! To see a motion to dismiss completley stressed me out and hopefully on Monday I can get these people to get me the information, however if I can't...then we'll have to prove through the check stubs it's them that hasn't paid.

Has anyone had an issue with payments that are actually taken out by the company...not paid? If trustee would've let us pay him directly, this NEVER would've happened!!

[magyar123]

The company is obviously sitting on the money. The longer the money is in their account the more interest they earn. Would not be surprised if they held on submitting taxes withheld to the IRS and SSA.

[AngelinaCatHub]

It is time for you or your lawyer to make an objection to the Court in that this is not your fault. Also, call the HR person at that company and address the fact that holding your funds is tantamount to stealing from you, damaging your name, inhibiting Federal Court orders, and you shall make suit against them unless THEY make payment with explanation to your Trustee. This is an unforgivable act. ‘Hub

[BK2008]

Call your State Employment Agency.
They definitly don't want to hear that employees are being withheld money that is not being forwarded on.
Also the Attorney General's office might be a good contact.

[rrockinggramma]

unfortunately you are responsible for those payments. Our booklet specifically states that it is the debtors responsiblity to see that all payments are made no matter what. Sounds like this company is about to go under. Glad your husband found another job. start sending in as much money as you can.

[Flamingo]

Your employer and payroll dept. exchange paperwork with the Trustee's office for those payments to be sent directly to the trustee. Your attorney needs to contact your trustee and advise them as to what is going on and the attorney and/or Trustee needs to contact your husband's former payroll dept. My question is, if your husband is a former employee and was paid a final check, why are they holding five weeks of payments and not sending it in? I am assuming since your husband terminated it put a hold on those disbursements since he was no longer an employee as of xxx date. The entire thing should easily be resolved by your attorney and trustee as long as there is no major error or something sneaky on the part of your husband's former employer.

[breathe]

unfortunately you are responsible for those payments. Our booklet specifically states that it is the debtors responsiblity to see that all payments are made no matter what.

This is how our lawyer explained it to us. We are responsible for the payment, regardless of circumstances. Which is why we chose to go ahead and get a cashier's check each month and mail it in. Hope u can work it out.

[Flamingo]

This is how our lawyer explained it to us. We are responsible for the payment, regardless of circumstances. Which is why we chose to go ahead and get a cashier's check each month and mail it in. Hope u can work it out.

In this case, it is apparent the trustee ordered payments through payroll deduction and many states require that (ours does). Since they already paid the money via payroll deduction and have the stubs to prove it, the former employer has those funds which are required to be sent to the trustee. I don't think the BK would be dismissed over a situation such as that if payments were held up under such a circumstance because the filer is not at fault and has proof. There is paperwork that is signed between an employer and the trustee as to sending in those funds so an inquiry from the trustee or the attorney to HR/Payroll as to the status of those funds should get the ball rolling. I'll bet it is due to the job termination because once an employee terminates, everything shuts down on that day for that person at the employer. The employee should have made arrangements ahead of time to ensure the payments were satisfactorily handled before he left his former employer and the trustee/attorney advised as to what was going on with the job termination since a payroll order was in place.

[AngelinaCatHub]

Yes, Flamingo, but if they are holding his money, doesn't he have recourse? He needs to communicate with his Trustee ASAP. If he is owed that money, they should have given it either to the Trustee or him. Like my sig says, if I knew it all, would I be here? We are not professionals in bk. (although I am learning one thing, lawyers are incompetent if you do not watch them.) 'Hub

[Flamingo]

Yes, Flamingo, but if they are holding his money, doesn't he have recourse? He needs to communicate with his Trustee ASAP. If he is owed that money, they should have given it either to the Trustee or him. Like my sig says, if I knew it all, would I be here? We are not professionals in bk. (although I am learning one thing, lawyers are incompetent if you do not watch them.) 'Hub

I mentioned all that in my initial posting on this.... You may have missed it.

First, they are required under the payroll order to send accumulated monies from the employee while he is employed with them to the trustee as indicated in the payroll order (just as is done with child support or other funds withheld from one's paycheck and sent in via a payroll order). What probably did not occur here was either the employer or the employee not taking care of any proper change to that Order to occur on the day of his employment termination. That is probably what is holding up the funds being transferred. I am sure his attorney or trustee can get those funds freed up and sent in unless there is more to this that is not being mentioned.

[AngelinaCatHub]

I mentioned all that in my initial posting on this.... You may have missed it.

First, they are required under the payroll order to send accumulated monies from the employee while he is employed with them to the trustee as indicated in the payroll order (just as is done with child support or other funds withheld from one's paycheck and sent in via a payroll order). What probably did not occur here was either the employer or the employee not taking care of any proper change to that Order to occur on the day of his employment termination. That is probably what is holding up the funds being transferred. I am sure his attorney or trustee can get those funds freed up and sent in unless there is more to this that is not being mentioned.

I agree with you but I would think the Court would cut him a break as long as he contacts them right away. He needs to hit on his attorney right on. Even if he goes in to the Courthouse and submits to the Court a letter of explanation to be posted upon PACER, this would not hurt. Like chicken soup it may not help but it wont hurt. I am concerned for such a small detail to 'F' over his situation. 'Hub

[dovette7]

To update:
Former employer emailed me that they have sent most of what they owe and they are sending one last payment. We personally sent in 2 payments (we have to pay weekly) to cover the 2 weeks that the payments were not automatically taken out.

Forwarded all that plus a spreadsheet showing ALL payments in our bankruptcy showing the missing payments is from the company, the paystubs showing when it automatically started coming out of his check and the last paystub that he worked there.

Emailed attorney and she said to definatly not worry about this. She's calling trustee tommorrow to let him know what's going on and that there shouldn't be an issue.
But that is easy to say and hard to do!....not worry that is.

Hopefully it will be cleared up in the next few days and the missing payments will be recieved.


We did talk with our attorney when husband left job. We were told to just make sure WE made the payments in between the time the new payroll deduction set in, which we have done.

Something else I didn't understand is that on National Data Center there was 5 weeks of payments posted on July 3rd. On the Motion to Dismiss which was written and filed on July 16th.... that amount wasn't included. Attorney said that sometimes it shows up on NDC and not on trustee site? That doesn't make any sense to me. If it was posted on NDC on July 3rd.... why would Trustee not see that it had been recieved?

[CH33 Paralegal]

The court is going to want to see proof of the EDO working and then the trustee is going to want to review that and compare it with their financials to see if there are any instances were the money was EDO'd but not sent to them. They have the information right down to the pay stub ID number of any and all payments they received from your employer. I'd suggest scheduling an appt with your attorney and providing the pay stubs as proof and asking them to help you out in resolving the missing money issue.

[Ortgeist]

My situation wasn't as drastic as yours. But about 4 months into my CH 13 BK, the lady in charge of payroll did not make the payment. I suspect it's from the company struggling under new ownership. However, when I called her to talk about it she just brushed over the fact that something happened and she didn't make the payment. I thought, do you even have any idea how stressful this makes everything. I actually think by the way she was acting that she personally messed up in some way. I understand human error. BUT... this is a big error! Every month I look at my paycheck stubs and compare to ch 13 data account ledger to make sure everything matches.

Sounds like your attorney doesn't think you should worry. I'm sure if you couldn't prove it then she would tell you to worry.
Hope everything goes smoothly for you from now on.

[dovette7]

2nd Update:
Attorney called and she had checked the Trustee website. The big missing payment from the company was there. She is calling Trustee to ask them to withdraw their motion bc with that payment, we are 2 weeks ahead of scheduale which I have no clue how that happened. That doesn't even include 3 additional payments that has not been recieved.

Hopefully he will withdraw because there is no reason to move forward. If he doesn't, she will go argue it at the hearing. But told me not to worry.

Another issue came up though...trustee requires payments automatically taken out of pay. My husband just started a new job in TX/AR where my attorney has no legal license. She cannot request the payroll deduct order and has tried this previously but companies wouldn't cooperate. She is asking Trustee if we can pay directly. I told her since this last problem with the previous company not paying on time, I would think he would be glad with it. So I wonder if she can't "legally" issue an order to take the money out of his check, what will trustee do? It would be great if husbby's new company did not have to find out about this. We have known the boss/family for years professionaly and even though I've gotten over most of the stigma and emberresment, I hope for hubby they don't have to know.