How do people get done early?

[jhy12]

just something I've been wondering. After all the creditors submit their claims and let's say you are only planning on a 65% payback (what's its projected to be at this point) over 5 years. If you are able to put more money in somehow, can it be paid off sooner? If we get to keep our tax refunds (which our attorney says we can) but we decide to give that to the trustee, does that shorten our time? Also, our private student loan will be rolled into the bk but my FIL will be paying the minimums so his credit doesn't take a hit so they will be paid off sooner. Would that shorten our time? Anyone have experience with this?

[justbroke]

There is some confusion as to whether you could after being 36 months into a 60 month (5 year plan). Let's not think about that for this response.

The bankruptcy code reads that if you're not in a 100% plan, that you must commit all your disposable income to the Plan. The only way to get out of the plan early is to dismiss your case (voluntary, involuntary), convert, or pay 100% of the "allowed unsecured claims" (plus your attorney fees, trustee fees, and probably priority unsecured claims).

There have been some cases where a person, after 36 months into a 60 month plan, has been able to get a payoff amount equal to the projected disposable income over the 60 month period (a/k/a the "percent payback").

I would never give "extra" money to the Trustee unless I'm in a 100% plan. (And even then, I'd have to consider the cost of money -- the net present value versus paying my plan off early.) In many cases, the Trustee will just say "thank you", take their 10% commission, and increase your "base plan" amount until it reaches 100%.

[markinva]

justbroke: You last sentence helps somewhat but still a little confused here. In my case, I've been in a 100% plan. Filed Oct 2011, Confirmed July 2012. Managed to save dilligently and made a large payment last month. I confirmed the payoff amount with the attorney and calculated that I can make another larger payment next month (Nov 2016) that will payoff the balance of the 100% plan. Since this will payoff the 100% plan in less than 60 months, can the trustee make me continue paying until July 2017, which would be the entire 60 months?

[justbroke]

markinva, my last paragraph was exactly to exclude 100% plans. If you are in a 100% plan, paying 100% of the base plan amount would allow you end your Chapter 13 at that point.

If you pay back 100% of the claims, there's nothing to compel the court or the Trustee to keep you in the Chapter 13.

[markinva]

Thank you - Getting so close to the end but STRESSED. The (aggressive) Trustee here questioned the large payment amount. I explained where it came from - all legitimate - and advised that I planned on making the last payment next month. ( I guess the Trustees office doesn't like to see their 10% cut of the payment end early) Just hoping and praying that the Trustee will not be asking me to produce a bunch of paperwork this late in the game.

[spidge]

A point yet to be mentioned is if one is above or below the median income for the area you live in. My understanding in my district is that if one is under median a 36 month plan is available but a 60 month plan could be used. I was barely under median and was given that option. I was also less than 100% payback. I inquired with my attorney once we paid the 36 month and I was told to focus on the base amount and that tax returns and unexpected windfalls might effect it. We did not pay off early though so cannot share an experience of paying off early.

The answer, as usual, is based on the district rules where you filed. Your attorney is your resource for that info. I found the more the attorney seemed to think I knew the more they explained to me. So I suggest you dig into your district rules.

[markinva]

just something I've been wondering. After all the creditors submit their claims and let's say you are only planning on a 65% payback (what's its projected to be at this point) over 5 years. If you are able to put more money in somehow, can it be paid off sooner? If we get to keep our tax refunds (which our attorney says we can) but we decide to give that to the trustee, does that shorten our time? Also, our private student loan will be rolled into the bk but my FIL will be paying the minimums so his credit doesn't take a hit so they will be paid off sooner. Would that shorten our time? Anyone have experience with this?

In a 100% chap 13 and close to the end here. From what I've read, it seems that a Trustee has the right to ask for your tax returns and refund at any time. If you get a refund, I would recommend that you not spend it at all while in the payment plan. Also completely agree with OPs that it is not wise to send extra to the Trustee unless you are in a 100% plan.