The U.S. Bankruptcy Code also allows individual debtors who meet certain financial criteria to adopt extended time payment plans for the payment of debts. An individual debtor on a regular income may submit a plan for installment payment of outstanding debts. This is called a Chapter 13 Plan. This plan must be confirmed by the court. Once it is confirmed, debts are paid in the manner specified in the plan. After all payments called for by the plan are made, the debtor is given a discharge. The plan is, in effect, a budget of the debtor's future income with respect to outstanding debts. The plan must provide for the eventual payment in full of all claims entitled to priority under the Bankruptcy Code. The plan will be confirmed if it is submitted in good faith and is in the best interest of the creditors.
A Chapter 13 plan must provide for the submission of all or such portion of future earnings or other future income of the debtor to the supervision and control of the trustee as is necessary for the execution of the plan. After the confirmation of a Chapter 13 plan, the court may exercise its discretion and order any entity from whom the debtor receives income to pay all or part of such income to the trustee.
A New Mexico Order Requiring Debtor's Employer to Remit Deductions from a Debtor's Paycheck to Trustee is a legal directive issued by a court in New Mexico that compels an employer to withhold a portion of an employee's wages and remit them to a bankruptcy trustee. This order typically arises within the context of a bankruptcy case where the debtor is required to make payments towards their debts. This type of order serves as a means of ensuring consistent and timely payments to the bankruptcy trustee, who is responsible for distributing payments to creditors in accordance with the debtor's bankruptcy plan. By having the debtor's employer withhold a portion of their paycheck and send it directly to the trustee, the court aims to simplify the payment process and prevent the debtor from neglecting their financial responsibilities. There may be different types or variations of this order, depending on the specific circumstances of the debtor's case. Some possible variations could include: 1. Voluntary wage deduction order: In certain instances, the debtor may voluntarily agree to have a portion of their wages deducted and sent to the trustee. This type of order requires the debtor's consent and cooperation, and it enables them to demonstrate their commitment to fulfilling their obligations. 2. Mandatory wage deduction order: If the debtor fails to make required payments or is found to be non-compliant with their bankruptcy plan, the court may issue a compulsory wage deduction order. This compels the employer to withhold a specific amount or percentage from the debtor's wages, ensuring consistent payments are made to the trustee. 3. Wage garnishment order: In cases where the debtor fails to comply with voluntary or mandatory wage deduction orders, the court may issue a wage garnishment order. Unlike the previous types, this order empowers the employer to deduct a specified amount directly from the employee's wages, without the need for involving the trustee. The withheld funds are then sent directly to the creditor or creditors. In summary, a New Mexico Order Requiring Debtor's Employer to Remit Deductions from a Debtor's Paycheck to Trustee is an important legal tool used to facilitate debt repayments within the framework of a bankruptcy case. Its variations depend on the debtor's agreement, compliance, or lack thereof, and can involve voluntary wage deduction orders, mandatory wage deduction orders, or wage garnishment orders.
