I have lots of questions (sorry it's long)...

[southernbelle]

Is it acceptable to pay off a Ch. 13 plan early. I'm thinking about using the exempt equity in my home (by selling it and living with relatives or my boyfriend) after I find out what I would be required to pay monthly "officially". I live in Louisiana and I have a prenump. the ex doesn't own anything and the house is 100% mine. . Is it necessary to wait 3 years because, I've heard that a couple of times. Is there any other way to expedite the plan if you have equity or money from relatives? I also have a very small income from a hobby that is cash only which will help with a little extra.

If I get engaged or married after filing Ch. 13 (say about 1 year after), how would that affect my payment plan? Do I declare his income and bills to the Trustee? Can they garnish his wages or take his assets if I drag him into this?

My income is above what the Means Test allows. When I did the test, I passed if I had late payments from my 1st and 2nd mortgages using the 1/60 calculation from the Test. If I don't have any late pays, I fail the test. That doesn't seem right. If I did "miss" a payment or two of the mortgage and paid off other mounting debts, what would the possibility be that the Trustee will still convert my case to Ch. 13 if I filed Ch. 7. If most of my debt is from business sales taxes, does it make sense to file Ch. 7 or Ch. 13 considering the interest and penalties that continue to accumulate.

Who should I continue to pay? I know to continue with secured payments like the mortgage (the car is paid off). What can creditors do to me in the 90 days I'm waiting to file? Can I get sued in that 3 months or wages garnished?

Does anyone have any experience with Trustees in south Louisiana? Do they normally comb over bank statements, cc statements, etc. with a fine tooth comb? I have recent loans and must wait at least 3 months before filing (I think I can hold creditors off that long) because I don't want to give the impression that I am trying to pull a fast one. I'd like to get my central A/C fixed in this 100 degree heat.

Can someone help me figure out what bills are allowed in Louisiana as part of what is considered in the Ch. 13 plan.
I have a YMCA membership, cable, etc. and was trying to realistically figure out what kind of expenses I would have after filing. I am single without dependants living alone (I am already preparing for the worst).

The 2nd atty. I met with said my monthly pmts would be about $975 per month which is much less than I've been trying to scrape together to pay creditors on my own. Most of my bills are from the taxes owed from a failed business. These taxes are sales taxes which are local and state taxes as well as IRS withholding (most of which I am still trying to file the returns for and none are older than 3 years old - thanks to the soon-to-be ex husband). Can someone point me in the right direction to elaborate on which taxes are allowed in BK and how to determine if I have more than 50% in non-consumer debt.

Sorry for so many questions. This is keeping me awake at night and I am really confused. I would hate for this to affect my boyfriend and our possible future together and feel really bad about it, but he seems to understand (or at least that's what he says). Sometimes I feel that maybe, if the creditors I am dealing with are reasonable, I can make it, and for the most part they are (when I'm paying them). Most of them don't really care about me or my personal situation and want me to blow off the rest of the creditors and put them first. I have liens on my home and need some solution to have some peace of mind because I feel that at any day now, someone can come and force me out of my home.

As a final effort to save my credit, I wrote a letter to the two main creditors asking for a reduction in the agreed monthly payment I am making to them. Normally they would be ringing my phone off the hook, but so far 2 days and no hear from. I guess they need time to think it over. In my letter to them, I did express the BK alternative which hopefully will shock them into reality and make them understand that it might be all or nothing. Sorry for the long post, but this is one of the best sources I've been able to find so far. Not to mention the moral support. Thanks again.

[coma]

In which district in Louisiana are you located? I'm in LA, also, and might can give some insight.

[biotechsolution]

If you end a 13 early I think it has to be 100% payoff, I think.

Not sure if you can end a chapter 13 early unless you pay it off at 100%, even to the unsecured.

The definitely advantage to a 13 for taxes is that the penalties are discharged, even on taxes less than 3 years old. Interest isn't discharged however. So if you have taxes that aren't dischargeable in a 7 the 13 is an alternative.

If you have much more business debt that is dischargeable in a chapter 7 it still may be worth it to file the chapter 7. Then deal with working something out for the back taxes.

If your tax debt and business debt is more than 50% of your total debt. Now remember you have to count your mortgage and auto loans has consumer debt.
For example: If you mortgage is 250K, car 25K and personal credit cards 20K.
Your tax and business debt would have to be more than 295K for you to be considered a 'non-consumer' debtor.

The biggest advantage is you can file for a chapter 7 pretty much regardless of your income. IN addition you are not subject to the mean test and mean allowances when figuring out your 13 plan payment. You just use schedule I and J, you can use many more expenses.

[southernbelle]

I live in East Baton Rouge Parish in Louisiana. I appreciate any help you can give me. Thank you.

[Flamingo]

Buying Out Early...

You have many excellent questions. As to buying out early in a Chapter 13; certain conditions have to exist and also a certain period of time (I believe it is still 3 years) has to pass from the date of filing in order for you to even consider buying out of your Plan. Prior to that period of time, to buy out you need to pay 100% of your Plan. We bought out of our 5 year plan early but we had enough equity in our house to do so. First you need to talk to your attorney about the situation at the appropriate point during your Plan and see if you are able at that time to actually buy out. The attorney will then contact the Trustee because you will need permission to be able to buy out. If you want to use the equity in your house, it will take months from the time you begin the process (after getting approval) to the time of actual settlement. It took us 6 months from the time we talked to our attorney who advised us to work through a broker as to refinance options to the time of actual completion of settlement on the refinancing. During that time the attorney and Trustee filed a Motion for us to be able to buy out of the Plan. There was an extra cost to have that done ($400.00). The best thing for you to do is to question your attorney about this process and also your concern as to your future relationships if you should marry while in a Chapter 13. Any increase in income coming into your household during your Plan could affect your entire Plan and would need to be reported to your attorney and trustee.