“Plan payments” are payments established in your plan that you prepare with the lawyer. You will make these payments each pay day to the Chapter 13 Trustee, who in turn pays your creditors. Creditors are required to look to the Trustee for payment, and can not collect from you directly (with a few exceptions, such as mortgages and leases: see below).
Plan payments are used to pay debts (other than current mortgage payments), such as cars, furniture, credit cards, etc. Chapter 13 lowers your contractual payments because these debts are usually paid slower than they would be under the contract. In Chapter 13, no interest is paid on unsecured debt, and in some cases, unsecured debts may be paid less than 100 cents on the dollar. Secured debt is paid with modified interest that is usually lower than the contract rate.
The amount of your plan payments depends on two things. One is the amount of debt you are paying through your plan, and the other is your ability to pay. The amount is carefully worked out with your lawyer so that the amount works for you, and also will work for your creditors. It’s a question of balance.
Plan payments start accruing as soon as the case is filed. Thus, one month after the case is filed, you will owe one month’s worth of payment.