Settling with CC companies during chapter 13

[howie]

Has anyone been 3-12 months into a chapter 13 plan and came into some money and tried to settle accounts on their own at a lower settlement? I was wondering would cc companies consider a settlement once payments for a 13 have started?

[funspot08]

Not a Good Idea

If the accounts are in the plan, which I assume all of your accounts would be, they aren't allowed to contact you to offer any settlement, ask for any funds, etc.

Take for a moment that they do. Well, if you sent them money to "settle" the account, they still wouldn't close the account. Since they are included in your plan, not only would they take the money that you sent them, but collect the money from your trustee each month as well.

[woeisme]

I think that if you are in a CH 13 and "come into some money" that the money belongs to the BK estate, not to you, so you don't have the choice as to how you use that money. Now some funds are exempt, and that varies from state to state (life insurance proceeds from a spouse, for instance, are exempt in my state, so wouldn't become property of the CH 13 trustee). But I think you would still need to dismiss your CH 13 before you could negotiate with creditors, as the automatic stay prevents them, by law, from settling your debt directly with you.

[stopcallingus]

Certainly would not do that. I was told by trustee at 341 hearing that I do not have the right to decide who to pay and who not to. If you come into money and want to work out a deal start with your atty or trustee to see if you can pay down your plan. At least that is what I would do.

[magyar123]

Why would you even try to settle accounts that are included in your filing, and ultimately partially paid by your monthly payment sentence?

[aa06a47]

Technically, the money belongs to the trustee and he/she will handle who gets it. Trying to negotiate with the creditors will alert them that you have money that needs sent to the trustee. Do not contact the creditors. Do not dismiss your case in an attempt to get them to settle...they won't...you cannot file bk for another 7 years....so why would they.

[Flamingo]

Has anyone been 3-12 months into a chapter 13 plan and came into some money and tried to settle accounts on their own at a lower settlement? I was wondering would cc companies consider a settlement once payments for a 13 have started?

If you come into money from any source during your Chapter 13 Plan, it needs to be reported to your attorney and Trustee before anything else. From the date you file to the date of discharge, your financial estate is under the control of your Trustee. Your accounts with your creditors are now under their BK sector and if you attempted to contact them, they would advise you to contact your trustee if they respond at all.

[howie]

Thanks everyone. My wife works for General Motors in Ohio and they are going to be closing the plant. We haven't actually filed yet as we are still waiting on attorney to complete everything. GM may offer her a buyout and I wasn't sure what would be the best way to handle the money. From the sounds of it, the trustee will let me know how to handle it.

[HHM]

Has anyone been 3-12 months into a chapter 13 plan and came into some money and tried to settle accounts on their own at a lower settlement? I was wondering would cc companies consider a settlement once payments for a 13 have started?

That would be the dumbest move ever.

[ssdsco]

Thanks everyone. My wife works for General Motors in Ohio and they are going to be closing the plant. We haven't actually filed yet as we are still waiting on attorney to complete everything. GM may offer her a buyout and I wasn't sure what would be the best way to handle the money. From the sounds of it, the trustee will let me know how to handle it.

How much debt do you have and how much is the potential payout ?

Can you hold off filing and put the money into exempt assets or spend it on necessities. Get the roof fixed or something.

You need to figure out what the smartest move ever is.