Paying Off a Ch13 early

[PoGirl]

Great news! I wish that were possible under the new plan.

[holding on]

Just received my yearly overview statement from my Trustee...it says at the bottom

"...Contact the trustee for a final buyout value. You cannot buyout if you have not been in your plan for 36 months or paying 100% to all creditors."

I'm 'new law' having filed May 2008. You think this is text the Trustee's office just hasn't gotten around to update, or is it the real deal? I very tempted to contact the Trustee's office (under an assumed name and from an untraceable number ) and ask.

[aa06a47]

I am under new law and my attorney said we can buy out after 36 months for the POT amount. I am not really sure where I would get the money expect a 401k loan and not sure that is a good idea either.

Note, I am not sure if this is something "local" or what. There was a decision in an appeals court concerning if the law meant 60 months of payments or 60 months of time. 60 months of payments was the decision if you were past 36 months. I will try and find that and post it. That is what my attorney was using to state we could pay in 36 months. However, this may be a Missouri thing. I see so much difference in the way things are handled around the country, it blows my mind.

[BK_Broiler]

I am curious about the audit. I am in a similar situation as you, a 5-year plan under the old law in which I am paying back less than 100% of total debt. I have just one year left but want to payoff early so I can buy a new home. My income has increased about 25% since I initially filed bk, but I have not disclosed this to the trustee. I assume the audit will expose the income discrepancy.... how will this impact final approval of the early payoff?

[Flamingo]

I am curious about the audit. I am in a similar situation as you, a 5-year plan under the old law in which I am paying back less than 100% of total debt. I have just one year left but want to payoff early so I can buy a new home. My income has increased about 25% since I initially filed bk, but I have not disclosed this to the trustee. I assume the audit will expose the income discrepancy.... how will this impact final approval of the early payoff?

What mattered the most for us in our early buyout (old law) is if you have enough money to buy out and where the money is coming from; in our case, it came from a refinancing and our ability to be able to acquire a decent refinancing at a low percent. Our income also increased during the first three years of our plan and we had to turn in our tax returns each year and there was never an issue as to the increase. Our equity during that time skyrocketed as we had a lot of equity in our home going into the Chapter 13. We actually refinanced to pay off the Plan and also do some major house repairs and still refinanced for way less than half the value of our house in early 2006. Thankfully we did not go for more cash with what was waiting on the horizon as to the economic and mortgage downfall.

[Home1]

Has anyone been able to buyout chp13 in the new law without being at 100%?

[lrprn]

Has anyone been able to buyout chp13 in the new law without being at 100%?

No.

And in the future, Home1, please don't post to old threads like this one. They can contain information that was accurate at that time, but may not be accurate now, especially in Ch 13. Instead please start a new thread of your own - thanks!

[nicktesla]

Discharged

Just to let everyone know our plan was discharged on Mar 2, 2010.
FYI if you plan on paying off your BR early (under the old rules) it takes about 2/3 months to get everything finalized. I wrote the check on Jan 2, 2010 and got the discharge letter in mid March.

[Home1]

Is it possible to buyout of chp13 in the new law?

[jimbo367]

Good question, if I could add to it what would happen if a bulk payoff came from a 3rd party

[Home1]

Great addition to the question - early paying off in chp13 new law ....
I am 24months in plan. Still curious if the 36months cut off applies whereby the plan payment remains the same and early pay off is possible from whatever means.

[lrprn]

Is it possible to buyout of chp13 in the new law?

Yes, but you have to pay back 100% to your unsecured creditors who filed claims.

The bk law change back in 2005 removed the early buyout provisions for Ch 13. Once those who filed bk after Oct 2005 began to reach the two year mark, the bk courts have ruled since then that to buy out of your Ch 13 plan early, it's 100% payback - no exceptions yet.

[Home1]

Thanks Irprn. My unsecured are in excess of 120k and my base pay back is 24k I thought I could double up after the 36months cut off as in old law where your base can't go up.
It hasn't been too rosey/cake walk but, I know with persistence and continuous planing and adjustment to how I live, I'll make it to the victory dance party - 60months.
Filing for bk is one of the best things that I have done I'm at peace with myself, sleeps well at night without creditors annoying calls.

[krielly]

We filed old law just under the wire in 10/05.

Our attorney is absolutely awful about returning emails/messages. I have the trustees email, so I just asked him directly many months ago if I could pay extra each month to try and get done early. He said that was fine.

I've been sending extra money every month for months now. Down to $1283 balance which hopefully I will be able to pay off in the next 30 days!!!!

We may be buying another house (if the folks who want to buy our home can qualify). I asked the trustees office how soon I could get a discharge after the final payoff. They told me that typically it takes 2-3 mos for discharge, but that if we had mortgage financing which was dependant upon our discharge, they could expedite and get us a discharge within a week of final payment.

We r SOOOOOOOO lucky to have the trustee we have!

K

[nicktesla]

Kreilly what kind of interest rates are you looking at borrowing so soon after a BR?

I figured we were stuck in our house for a few more years at least.
Fortunately I think we only have 8 years left on a 15 year note at 4.7%.
The house is starting to grow on me when I think of only having 8 more years to pay for it.