Bankruptcy Deduction Orders

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Bankruptcy Deduction Orders

If we receive a bankruptcy deduction order, usually as part of a Chapter 13 Wage Earner Plan*, which directs us to withhold a certain amount and to pay it to the Bankruptcy Trustee, we will send a letter to the employee or member’s pay office asking them to withhold the court-ordered amount and to pay the Bankruptcy Trustee. 

Payment to the Trustee will be made in accordance with your normal pay cycle. Bankruptcy law authorizes us to withhold up to 100 percent of the employee or member’s disposable earnings, as directed by the Trustee.
 
* In rare cases a payroll deduction order can be issued in a Chapter 7 case.

Updated January 18, 2013