Adequate Protection Payment

In chapter 13 bankruptcy, an adequate protection payment is a small disbursement by the trustee of funds early in the bankruptcy case to compensate a secured creditor for depreciation of collateral.

Frequently Asked Questions

Our frequently asked questions also address Adequate Protection Payment:

What is an Adequate Protection Payment?

Basically, adequate protection payments are early-case disbursements made by the chapter 13 trustee from funds the debtor as paid to the trustee, which are directed towards holders of car loans and other certain secured claims on personal property. The theory behind these small payments is to protect the lender from depreciation while the case is pending.

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