Extra payments to Ch 13?

[srehbeger]

I am in month 38 of 60 month plan. If I was to start making extra payments each month, would it help me pay off the 13 early? From everything I have read, it sounds like month 36 was the key to not have to pay back more.

[lrprn]

srehbeger, I moved your question here into its own thread so you would get better responses. In the future, it's better to start a new thread of your own rather than tagging a question onto a months-old, inactive thread - thanks!

I am in month 38 of 60 month plan. If I was to start making extra payments each month, would it help me pay off the 13 early? From everything I have read, it sounds like month 36 was the key to not have to pay back more.

*IF*you are paying back 100% to your creditors in your 60 month plan, then making extra payments could help your plan end earlier.

*HOWEVER* if your payback % is currently less than 100% to your creditors in 60 months, any extra you pay in now will be given over to your creditors by your trustee to increase their payback %, not reduce your number of payments. Also your monthly payment could increase because now the trustee knows you have more disposable income - not a desireable outcome, I'm sure.

Did you ask your lawyer about this?

[srehbeger]

No, I haven't talked to my lawyer yet. Our plan has us paying 0% to unsecured. We are just paying on arrearage from our house and cars. I was hoping that since we are already past the 36 month mark that they wouldn't be able to take any more of our extra disposable income. Instead, I would just pay extra each month to pay it off that much earlier.

BTW....thanks for moving it. I started to do a new thread, but read the rules and it didn't read that way. In the future I will do that. Thanks again!

[SinkingFast]

The 36 month thing is and Old Law BK practice.

At, or after, the 36th month, Old Law filers could "buy-out" at the $$$ amount set at the start of their Plan. Since you're at the 36 month mark, you're obviously an Old Law filer. You could probably "buy-out" to end your plan early if you wanted.

In your case tho,.......... If you're just wanting to send in extra per month to cut off months and end your plan early, it's doubtful that would work. More than likely, the Trustee would go for a Plan modification to get more money out of you each month. Pay back some to your Unsecureds.

Personally, I'd leave this one alone. Leave sleeping dogs lie, so to speak. Unless you can save up enough money, or refi your house, to get the cash to pay the plan in full at some point.

[aa06a47]

I am in month 38 of 60 month plan. If I was to start making extra payments each month, would it help me pay off the 13 early? From everything I have read, it sounds like month 36 was the key to not have to pay back more.

Under the old law, which I believe since your in month 38 you filed under, the code pretty much limited the "all disposible" part to 36 months. After that, the trustee really didn't care what you made. I would check with the trustee but it should be OK to pay off early if you like.

The new law changed the phrase to all disposible income for the applicable period of 36 months or 60 months depending on your income. While my attorney states it is still ok to pay off after 36 months the POT, I feel there will be rulings on this later down the road.

[treehugger1]

I would think that if you are in a 100% payback plan, you're free to send extra money to the trustee after 36 months, old law or new law. If you are not in a 100% payback plan, I would think it unwise to suggest you have additional "disposable income." But, I'm not an expert in what might be acceptable among the various BK courts/trustees. If you are comfortable with your current setting, just keep paying "as agreed" by the current plan.

[kags1969]

Savings Account

I would just take the "extra" payment and put it in a savings account. I think most trustee's will let you buy out after 36 months. So just start a savings account and when you have enough in savings, request a payoff amount from the trustee.

kags

[srehbeger]

I spoke to my attorney and they suggested I just keep the money is savings. They said if I start sending in extra money to the trustee, despite being past the 36 month mark, they may reevaluate my plan. So, now I am just building up a huge nest egg. Thanks for all your advice!!

[CindyLou]

Don't open that can of worms! If you are paying 0% to unsecured and suddenly you have extra money then they could come out of the wood work and object. it might now work....the law is on your side, but you woulnd't you hate to have to fight that???