§ 44.1     First Test of Debtor’s Good Intentions
Cite as:    Keith M. Lundin, Lundin On Chapter 13, § 44.1, at ¶ ____, LundinOnChapter13.com (last visited __________).

Added to the Code in 1984 and awkwardly amended by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA),1 11 U.S.C. § 1326(a)(1) requires the debtor to commence making payments within 30 days after the plan is filed or the order for relief, whichever is earlier, absent a court order otherwise.2 Without regard to when a plan is filed, every Chapter 13 debtor must commence payments not later than 30 days after filing the petition or seek a court order for relief from that requirement.


Section 1326(a)(1) is a significant first test of the debtor’s willingness and ability to fund the proposed plan. The debtor must quickly restructure the family budget to permit commencement of payments. This is not always simple because it may take days or weeks before the automatic stay stops garnishments and voluntary allotments and payroll deductions that may be consuming the debtor’s income. Debtor’s counsel may have to help the debtor by writing letters or securing court orders to release the debtor’s income from all other deductions.3


In some jurisdictions, the first payment required by § 1326(a)(1) will be due before an income deduction order is issued by the court to the debtor or to the debtor’s employer.4 Thus, the debtor must voluntarily remit to the trustee the funds required by the plan. Counsel should carefully explain to the debtor the amount of payment, when it should commence and to whom it should be delivered or sent. Experienced debtors’ counsel inform the debtor in writing of the details required for compliance with § 1326(a)(1).


BAPCPA added strangely worded new requirements for preconfirmation adequate protection payments and payments on personal property leases—discussed in detail in Part 9.5


1  Pub. L. No. 109-8, 119 Stat. 23 (2005). See § 401.1 [ Preconfirmation Payments ] § 44.6  Preconfirmation Payments after BAPCPA.


2  See 11 U.S.C. § 1326(a)(1), discussed in § 401.1 [ Preconfirmation Payments ] § 44.6  Preconfirmation Payments after BAPCPA.


3  See § 36.7 [ Order to Pay Trustee ] § 36.30  Order to Pay Trustee.


4  See §§ 248.1 [ Order to Debtor’s Employer ] § 125.1  Order to Debtor’s Employer251.1 [ Failure to Deduct or Remit ] § 125.6  Failure to Deduct or Remit.


5  See §§ 401.1 [ Preconfirmation Payments ] § 44.6  Preconfirmation Payments after BAPCPA, 402.1 [ Disposition of Preconfirmation Payments ] § 44.7  Disposition of Preconfirmation Payments after BAPCPA, 426.1 [ Adequate Protection Rights before Confirmation ] § 57.3  Preconfirmation Adequate Protection Rights after BAPCPA and 427.1 [ Preconfirmation Rights of Landlords and Lessors ] § 57.4  Preconfirmation Rights of Landlords and Lessors after BAPCPA.