Monthly payment question?

[up2myeyeball]

I'm still in the process of getting my paper work done and I'm looking at filing either mid January or the first of February. Anyway, once is filed you start making your monthly payment for five years right. Anyway, my questions are. Do you have to wait until five years to pay for the whole thing? Let say you just happen to get an extra job and you decide to pay more a month. Is that possible?

Thanks,
Ray

[AboutToBK13]

I'm still in the process of getting my paper work done and I'm looking at filing either mid January or the first of February. Anyway, once is filed you start making your monthly payment for five years right. Anyway, my questions are. Do you have to wait until five years to pay for the whole thing? Let say you just happen to get an extra job and you decide to pay more a month. Is that possible?

Thanks,
Ray

Well, if you are paying back 100% of the unsecured creditors then yes that might be possible.

If you are not paying back 100%, there is a good chance the Trustee will say thanks for the extra money and take it for your creditors. Remember you have to (at least where I live) turn in your tax returns yearly to the Trustee.

[isitreal]

ATBK13 is right... You can pay off early only if you are paying back 100%. Otherwise you still pay for 5 years and you just will pay extra and move from 60% to 80% or whatever percentage you actually pay back...

[lrprn]

Do you have to wait until five years to pay for the whole thing? Let say you just happen to get an extra job and you decide to pay more a month. Is that possible?

Ray, if you pay more than your normal Ch 13 payment and you aren't in a 100% payback plan already, then the trustee just takes the extra money and your creditors get it. It doesn't shorten your plan at all.

Bottom line...you are in your Ch 13 plan until:
- All the creditors who filed claims are paid 100%
- You reach the end of your plan (I assume 60 months)
- After three years of on-time payments, your trustee allows you to buy out of your plan early by paying back all your creditors that filed claims in full

There's just no easy out. Sorry.

[kmb]

You are allowed to get permission to "buy-out" though after 36 months according to my attorney. He indicated we shouldn't pay a dime over our current payments until then, but then after we're in the plan for 36 months, we can accelerate our payments (even if we aren't at 100%) and be finished early.

He and the trustee actually had this conversation. The payments we make now are absolutely the most we can afford, but in 3 years our kids will be in school full-time and we won't have daycare costs. The trustee actually said he "expects" us to get done in less than 5 years when we are able to take that daycare money and put it towards the plan.

[Jayntee]

Guess I'll post this here first

I'm looking for similar advice. Wife and I are 26 mos into 36 mos plan. Payment is 2200/mos, remaining unsecured balance is 15K, remaining secured is 5K. Wondering if there is anyway to pay secured and then negotiate a settlement for unsecured? Any info would be appreciated.

[HHM]

I'm looking for similar advice. Wife and I are 26 mos into 36 mos plan. Payment is 2200/mos, remaining unsecured balance is 15K, remaining secured is 5K. Wondering if there is anyway to pay secured and then negotiate a settlement for unsecured? Any info would be appreciated.

Nope.

Plus, it wouldn't really make sense to do so at this point, stick with the plan. If you bug out of a chapter 13 early, the credit cards get to add back in all accumulated interest, etc, from the date the Chapter 13 started.

[Flamingo]

I'm looking for similar advice. Wife and I are 26 mos into 36 mos plan. Payment is 2200/mos, remaining unsecured balance is 15K, remaining secured is 5K. Wondering if there is anyway to pay secured and then negotiate a settlement for unsecured? Any info would be appreciated.

HHM is correct. If you want to buy out early, you will have to pay back unsecureds at 100%. That is if you first can even consider buying out early - usually the way to do that is if you have enough equity in your house to refinance and it takes months to go through all that with getting trustee approval, a total review of your finances, house appraisals and more attorney fees to file a Motion to refinance and buy out early and then final settlement. It took us 7 to 8 months from start to finish ouf our early buy out (intial OK from attorney to final closing). If you were in a five year Plan and at month 36 with no late Plan payments and enough equity in your house to buy out the remainder of your Plan, then I would say go for it. At this point, listen to HHM. While I know how difficult it is to be in a Chapter 13, keep the hatches buttened down and finish it out - you are too close now to the end of your Plan.