31 months in and I got downsized!

[DOA]

Well, it seems my employer needed to downsize and let a total of 20 people go permanantly as of Tuesday.......and I was one of them. I'm 31 months in and now it could all go up in smoke. I'm hoping the trustee will let me payoff early out of my severance or 401K that I will be pulling anyway. I only owe another $3100, and I would think my circumstances warrant the request. Have yet to hear back from my attorney, so it looks like I will be setting in her office today, since I have nothin else to do all day. Anyone have any experience with early payoff?

[woeisme]

You filed after the new laws went into effect, but 36-months has been the early payoff timeframe under old law. Don't know what happens in a hardship case but in general if you try to do early payoff before 36 months they wanted 100% payback plans under old law. It sounds like you are going to be a possible test case for the new laws and unfortunately no one is going to have any experience with new law early payoff to help you out because the new law went into effect almost exactly 36 months ago so there won't be anyone in that situation for a little while yet. If you only owe $3100 and can pay that back with severence funds, you might want to hang on the next 5 months and keep making your payments then see about early payoff 5 months from now when you'll be both at the magic 36-month mark that old law allowed and also possibly will have some idea of how the new law is going to treat early payoff. Please keep us informed on how it goes no matter what you decide, I think a lot of us new law CH 13 would be very interested in knowing how this goes. Good luck, and hoping you find another job soon!

[flower04]

Good luck and let us know how it goes, I'm definately interested on what happens. My DH works for a retail based company and he could be in the same shoes.

[DOA]

You filed after the new laws went into effect, but 36-months has been the early payoff timeframe under old law. Don't know what happens in a hardship case but in general if you try to do early payoff before 36 months they wanted 100% payback plans under old law. It sounds like you are going to be a possible test case for the new laws and unfortunately no one is going to have any experience with new law early payoff to help you out because the new law went into effect almost exactly 36 months ago so there won't be anyone in that situation for a little while yet. If you only owe $3100 and can pay that back with severence funds, you might want to hang on the next 5 months and keep making your payments then see about early payoff 5 months from now when you'll be both at the magic 36-month mark that old law allowed and also possibly will have some idea of how the new law is going to treat early payoff. Please keep us informed on how it goes no matter what you decide, I think a lot of us new law CH 13 would be very interested in knowing how this goes. Good luck, and hoping you find another job soon!

I'm sorry, but I filed before the new laws came into effect. It was originally filed as a 7, and converted to a 13. So I am still operating under the old standards.

[Flamingo]

We too were old law. Our Plan indicated that payments were still to be made "even if you lost your job." Go back and read your Plan paperwork. Contact your attorney immediately (as I think you were or are in the process of doing) and you will be guided accordingly. Unfortunately, buying out prior to 36 months in your Plan under the old law would require you to pay back 100%. You don't list the percentage of your Plan. Hopefully you will be able to find another job quickly and pay off that balance.

Let us know how you make out...best of luck to you.

[lrprn]

First, I'm so sorry to hear you were laid off. What a horrible thing to happen with so many months paid successfully into your plan

Since you are old law, there's a possibility you MIGHT be able to pay out early. Have your lawyer negotiate it with your trustee. And be sure to ask your lawyer if an early payout will require you to back back 100% of creditor claims filed in your case.

Another option - your trustee may be willing to suspend a few months of payments to see if you find another job. Your lawyer can negotiate that too.

One more thought - after you are laid off, if you continue to pay a few monthly payments from your 401K to let your income drop, it's possible you might be able to convert to a 7. Ask your lawyer if that's a possibility too.

[DOA]

Well, I discussed it with the attorney, and I think I am just going to put the money from severance aside and pay out the plan. My trustee hasn't been the most compassionate or predictable person in the world since this started, so no reason to rock the boat until I have too.