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.
Title: Understanding the New Mexico Order Requiring Debtor's Employer to Remit Deductions from a Debtor's Income to Trustee Introduction: In the state of New Mexico, when a debtor files for bankruptcy, a legal process is initiated to ensure the fair distribution of assets to creditors. One such process is the New Mexico Order Requiring Debtor's Employer to Remit Deductions from a Debtor's Income to Trustee. This order outlines the obligations of the debtor's employer to withhold a portion of the debtor's income and remit it directly to the bankruptcy trustee. This comprehensive guide aims to provide an in-depth understanding of this order and its various types. Types of New Mexico Orders Requiring Debtor's Employer to Remit Deductions from a Debtor's Income to Trustee: 1. Wage Garnishment Order: A wage garnishment order is a common form of the New Mexico Order Requiring the Debtor's Employer to Remit Deductions from a Debtor's Income to Trustee. It mandates the debtor's employer to withhold a specific percentage of the debtor's wages and pay it directly to the bankruptcy trustee. This type of order is typically used to recover outstanding debts and ensure creditors receive their entitled payments. 2. Disposable Income Order: A disposable income order is another variant of the New Mexico Order Requiring the Debtor's Employer to Remit Deductions from a Debtor's Income to Trustee. It determines the amount of a debtor's discretionary income, i.e., the excess income after accounting for necessary expenses, that must be remitted to the trustee for distribution among creditors. This order ensures that the debtor's disposable income is utilized toward repaying outstanding debts while allowing the debtor to maintain a reasonable standard of living. 3. Spousal and Child Support Order: In cases where a debtor owes spousal or child support, the New Mexico Order Requiring the Debtor's Employer to Remit Deductions from a Debtor's Income to Trustee may be modified to include these specific obligations. This variation orders the employer to deduct a predetermined amount from the debtor's income to be directed towards fulfilling spousal or child support obligations, ensuring consistent payments. 4. Specific Debt Repayment Order: In certain situations, a New Mexico Order Requiring the Debtor's Employer to Remit Deductions from a Debtor's Income to Trustee may be tailored to address specific debt repayment obligations. For instance, if a debtor owes a particular creditor a significant amount, this order can be modified to specify the percentage or fixed amount to be deducted from the debtor's income and remitted directly to that creditor. Conclusion: The New Mexico Order Requiring Debtor's Employer to Remit Deductions from a Debtor's Income to Trustee plays a crucial role in bankruptcy proceedings by ensuring the equitable distribution of a debtor's income among creditors. Whether it is a wage garnishment order, disposable income order, spousal and child support order, or a specific debt repayment order, these types of orders serve to maintain financial stability and prioritize debt repayment for the benefit of all parties involved. Familiarity with these orders enables debtors, employers, and creditors to navigate the bankruptcy process smoothly and fairly.
