Even though the Debtors admitted that they did not meet th venue requirements of 28 U.S.C. § 1408, the bankruptcy court held that Rule 1014 required dismissal or transfer of a case filed in an improper district only on the filing of “timely” objection by a party in interest. Here, First New York Federal Credit Union did not object to venue until after the §341 Meeting of Creditors, payments had been collected through wage garnishment, and a proposed plan was pending, and then only on the 2nd to last day to object to Confirmation.
This is yet another reason why Chapter 13 Trustees should commence wage garnishment prior to confirmation of the plan. (11 U.S.C. § 1325(c) authorizes the issuance of an income deduction order “after confirmation of a plan.” While some courts interpret this clause to prohibit issuing income deduction orders until a plan is confirmed, other courts read § 1325(c), particularly when conjoined with the § 1302 (5) requirement that the Trustee “ensure that the debtor commences making timely payments under section 1326 of this title” and § 1326(a)(1) mandate that "Unless the court orders otherwise, the debtor shall commence making payments not later than 30 days after the date of the filing of the plan or the order for relief, whichever is earlier, in the amount... (A) proposed by the plan to the trustee) to be permissive and not preclusive of issuing an income deduction order at the filing of the case.
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