Has anyone bought out their plan with refi since new laws went into affect?

[bigreddog]

I'm 9 mths. into a 60 mth. plan. Our attorney said in a year we could refi and buy out our plan. We've made all our payments and our mortgages have never been late and are paid outside of the plan. I just checked NDC and we have a balance of $18,000 on priority secured pmts. CAN you buy out in one year which will be May 18th. Does the money have to come only from a home refi?

[holding on]

Are you paying back at 100%? I'm not positive but if you had claims from other non priority unsecured creditors I thought that buying out was not a good option because the trustee would just put your extra income from the refi towards them. But if your attorney said you could buy out hopefully he or she is on the spot.

[MajorMike]

bigreddog,
Can you keep everything in one thread? You CANNOT buy out if you're not at 100% payback. You are only paying 1.1% to your unsecureds and I HIGHLY doubt any trustee would allow you to only pay the $18K of it to get out.

[Flamingo]

I'm 9 mths. into a 60 mth. plan. Our attorney said in a year we could refi and buy out our plan. We've made all our payments and our mortgages have never been late and are paid outside of the plan. I just checked NDC and we have a balance of $18,000 on priority secured pmts. CAN you buy out in one year which will be May 18th. Does the money have to come only from a home refi?

In a five year plan, if you want buy out prior to 36 months into your plan, you will need to pay back 100%, not the percentage that you are presently paying in your Plan. If you have enough equity in your home at that time (your attorney feels you may have enough after one year if I am reading your posting correctly), you can have your attorney confer with the Trustee to see if you will be able to buy out at that time and what will occur is that the attorney and trustee jointly will petition the Court with a Motion for you to be allowed to buy out of your Plan. You will incur an additional cost for that (ours as $400 in 2006). You will need to provide all sorts of paperwork to your attorney and trustee showing that you can buy out (i.e., house appraisal, refinance approval, etc.). It is a time consuming, complicated matter but your first step is to work with your attorney when you believe you have enough equity to buy out of your Plan. Remember, if it is prior to 36 months in your Plan, you will more than likely be required to pay back 100% to all creditors.

Keep continuing to make ALL your payments and do not be late during the entire period when and if you decide to buy out. Your refinancing will not be approved if you have one late payment to your Trustee or to your present mortgage lender.

[Liz]

Is that the percentage that gets paid back to unsecured creditors, 1.1%?

[aa06a47]

There is even some question if you can buy out of a new law plan after 36 months due to the "all disposible income for the applicaple period" language in the law. We should know by the end of this year of any rulings on the matter.

[MajorMike]

Is that the percentage that gets paid back to unsecured creditors, 1.1%?

In his instance, it is. Everyone will be different.

[bigreddog]

Sorry Major Mike. I'm still not sure about what you mean by keeping it all in one thread. Like I said earlier somewhere else, I've Googled 100's of different variations searching for answers that obviously my/our attorney didn't give us. I guess based on the amount of time he spent with us and the extra we paid HIS accountant, the hrly. rate probably wasn't too bad. But I think we would have walked away if we thought we were going to be in this for 5 yrs. It's not any fun running a business, paying 20 employees and having nothing left for yourself for yrs. with someone always looking over your back looking for a mistake. And we definitely wouldn't have lost our house or cars. I'm wondering why we should go on. Again, I'm sorry for asking too many questions in too many places.

[MajorMike]

It's ok! I can tell you're stressed but a BK isn't supposed to be a cakewalk, unfortunately. It sucks with the new laws but we have to abide by what the court tells us. You will be in it for a min. of 36 mos or up to 5 years. You have to wait and make timely payments so that when you're ready to buy it out, you will have no problems.
You are only in a very small payback...so you're really out of options and what your attorney is telling you is not correct in regards to buying it out with a refi. Did you check PACER yet?

[bigreddog]

Yeah, I'm stressed out. My wife and I grew up with NOTHING. And never asked for anything from anyone. And we bought a 1 person cleaning business and grew it to 20 plus employees who we treat with respect and pay at least 20% more than anyone else. Because that's how you get good people. And in 12 yrs. we've never missed a payroll. And never, ever missed a single pmt. to ANYONE. But we got caught in the trap of trading up from our first ever house to another one. Than bought a fixer upper so our best friends could move closer and we fixed it up together. And I swear to god, what got us was credit cards that went from 2.9%,3.9% etc. to 22.9 and 29.99% just because they felt with our balances we were a risk. What kind of a risk is someone who has never missed any payments with over a million dollars in credit????? And once the snowball starts rolling down the hill, what can stop it.
I guess I can save my time googling for the next 41 months because now I have my answer. And it sucks. But I guess I should count myself as lucky. We now have a little apartment attached to the house we bought and rehabbed for our friends. And we sit out on the back deck together and sometimes laugh. Thanks for all your thoughts and answers. Audios.............