Consumer Bankruptcy Law and Practice: 12.4.4 Payments Directly to Creditors
Another type of provision that may be a classification is the designation of certain claims to be paid “outside the plan.” What this means is that the debtor will make payments on these claims directly to the creditor, instead of through the trustee. Such provisions may offer a number of advantages. They usually save the debtor from paying the trustee’s fees and costs of up to ten percent on such debts, a factor that may be important in cases in which the payments on one debt, such as a home mortgage, are particularly large.