justbroke-Another thing my attorney told me

[bksmith12345]

Thanks for all your replies in my other thread. Sincerly appreciate it.

Another thing my attorney told me was that we could buy out our plan early. I guess if we had a windfall or money from family. Even the trustees website says something about that as well. Is this true?

Thanks, Ed

[justbroke]

Another thing my attorney told me was that we could buy out our plan early. I guess if we had a windfall or money from family. Even the trustees website says something about that as well. Is this true?

Yes it's true. However, he failed to tell you that the current consensus amongst legal scholars and laypeople, like me, you would have to pay 100% of the allowed secured claims submitted. (This is for new law -- BAPCPA of 2005 -- plans filed on or after October 1, 2005.)

For example. Say that you had $125K in unsecured creditors. Additionally, let's say that only $75K of those claims are submitted and allowed. Let's say that your plan payment to unsecured creditors was $0.00 (a 0% plan).

You would have to pay $75K or 100% of the allowed unsecured claims, to get out of the plan.

In the old law.. prior to the BAPCPA of 2005... it was possible to buy out after 36 months at the rate that your Plan was! The majority believes that this is not possible now because of the BAPCPA changes after 10/1/2005.

[bksmith12345]

Wow! He told us as an example: Let's say the plan is $300 for 60 months. 12 months in we $300 x 48 months= $14,400. We pay the 14,400 to the trustee and we are done. The unsecured all goes away. The second lien on the house vanishes and we move on with our lives. BK over, second mortgage gone and we continue to pay the house and cars as we have been doing.

Thanks

[justbroke]

Wow! He told us as an example: Let's say the plan is $300 for 60 months. 12 months in we $300 x 48 months= $14,400. We pay the 14,400 to the trustee and we are done. The unsecured all goes away. The second lien on the house vanishes and we move on with our lives. BK over, second mortgage gone and we continue to pay the house and cars as we have been doing.

"Old" law (prior to the BAPCPA of 2005), what you wrote was accepted practice.

Today, the consensus leans towards the you must pay 100% to allowed unsecured claims.

The problem is, that the BAPCPA of 2005 started 10/1/2005 and the 36 months have just elapsed. We are sure that there is and will be litigation over whether a debtor can buyout of a post BAPCPA plan, for less than 100%.

If you want to make legal history... go for it!

[bksmith12345]

There is no unsecured debt in the plan. The $320x60 month plan includes: 2 1st mortgage payments, 4th quarter town tax, 2 car payments me, 1 car payment wife, John Deere cram down. Since there is no unsecured debt in the plan could we buyout then?

Thanks

[Nicki8875]

There is no unsecured debt in the plan. The $320x60 month plan includes: 2 1st mortgage payments, 4th quarter town tax, 2 car payments me, 1 car payment wife, John Deere cram down. Since there is no unsecured debt in the plan could we buyout then?

Thanks

So you have 3 cars and were able to keep them all? That is what I am concerned about- but we owe on them all.

[justbroke]

There is no unsecured debt in the plan. The $320x60 month plan includes: 2 1st mortgage payments, 4th quarter town tax, 2 car payments me, 1 car payment wife, John Deere cram down. Since there is no unsecured debt in the plan could we buyout then?

Are you saying that there are no unsecured creditors and claims? Or, are you saying that you are paying 0% to unsecured creditors? These are two different things.

And, if you cramdown anything, and strip your 2nd mortgage, then you do have unsecured creditors. The 2nd mortgage becomes an allowed unsecured claim, as does the difference between the value of and the claim of your other secured (your cramdown) of your vehicles.

[bksmith12345]

Hi,
No. I had two payments on my car in arrears. My wife had 1 payment in arrears on her car. So, only two cars but 3 monthly payments.

Thanks

[justbroke]

Hi,
No. I had two payments on my car in arrears. My wife had 1 payment in arrears on her car. So, only two cars but 3 monthly payments.

Thanks

I don't know if you were replying to me, but the cramdown portion is unsecured debt.

[bksmith12345]

Justbroke you are right. There is a second mortgage lien strip of 75K and John Deere cram down. The JD we owe 9100 and cramming it to 5000. So i guess to buy out I would pay the plan amout, 75K 2nd mtg, and about 4100 cram down. Is that right?

Thanks

[justbroke]

Justbroke you are right. There is a second mortgage lien strip of 75K and John Deere cram down. The JD we owe 9100 and cramming it to 5000. So i guess to buy out I would pay the plan amout, 75K 2nd mtg, and about 4100 cram down. Is that right?

According to the majority opinion on the new laws... you'd have to pay 100% of $79,100 at least to buy out your plan.

[bksmith12345]

Fair enough. You sure know your stuff! Thank you very much.