New Law Chapter 13 Buyouts Question...

[MOMof3]

Has anyone heard anything about whether or not new law Chapter 13 filers will be able to buy out their plans at the 36 month mark at their confirmed pay back percentages? The reason I ask is that my lawyer said something interesting in a reply to my question about selling our house...she said "if you wait until you have completed 36 months, we can just request a payoff and complete your current bankruptcy" this in response to my question about selling now & converting to a 7. Do you think she is confused, or that she knows something? All that I've read here suggests that under the new laws this may not be possible? I can reply back to her, but sometimes I prefer that she doesn't think that I know too much or am second guessing her.

[chpxiii]

I think you can do so only if you are in a 100% payback plan..

[MOMof3]

We are at less than 10% payback to unsecureds so no way at 36 months could we do a 100% buyout. That's why I am confused by her comment.

[tofargone]

My understanding from what my lawyer told me was we can buyout anytime, but only at 100%. We are slated at 76% so the difference for us is anly a couple thousand.

I am listing the house soon.....

[AboutToBK13]

I have seen speculation but, has anyone at this point been in a new law CH 13 to test the theory? New Laws October 2005, if my math is correct, no one in the new law bk hits 36 months until October 2008 at the earliest.

I honestly don't think we will no what will happen for certain until the end of this year when people begin to actually challenge the new law for payoffs. And if I had to bet, I would imagine that each Trustee and District will look at things differently. I would we expect uniformity with the law.

[MOMof3]

Reply from lawyer to my question regarding new vs. old law buyout:

"There is no reason to believe that after 36 months the trustee will not accept a proposal to buy out your confirmed plan as long as there is enough equity in your home to cover the remaining base payments outlined in your plan & your disposable income over the remaining 2 years of your plan is not expected to significantly increase"

The email goes on to remind me that the majority of my payment is my ongoing mortgage payment and that I will have to continue to make that payment after discharge---like duh?

Humm...maybe we'll just have to wait and see?

[Granny]

Reply from lawyer to my question regarding new vs. old law buyout:

"There is no reason to believe that after 36 months the trustee will not accept a proposal to buy out your confirmed plan as long as there is enough equity in your home to cover the remaining base payments outlined in your plan & your disposable income over the remaining 2 years of your plan is not expected to significantly increase"

The email goes on to remind me that the majority of my payment is my ongoing mortgage payment and that I will have to continue to make that payment after discharge---like duh?

Humm...maybe we'll just have to wait and see?

So if most of your payment is your current mortgage payment, what happens to the money if you buyout? Would they send it to the mortgage company or spread it among the unsecureds and let you continue to make your monthly mortgage payment. If that's the case, I think you would be shooting yourself in the foot with a buyout.

[MOMof3]

The Refi would buy out the base plan and then we would just make the monthly mortgage payment on our own after that. I think she was just making sure that I didn't think I wouldn't have to make my mortgage payment after discharge, since the trustee pays it now---and let us know that we technically aren't paying very much per month to our debt even though our payment to the trustee is extremely high.

We actually won't be much better off cash-wise after our 13 because our payment is mostly mortgage & after the 13 is done we will have to pick up our student loan payments again. BUT, we won't owe on our credit cards anymore & be behind on our mortgage.