Confused

[ccfriend]

I am one year into a ch 13 bankruptcy. I met with my lawyer today because I received a motion to dismiss because I didn't pay my state taxes to the trustee. (I thought I only had to pay the federal taxes over $1602) Anyway...I am all squared away with that...but while I was there I asked my attorney some things that I have been wondering. I asked the big question about early buyout....
He said that yes you can still buy out early and not pay 100%. He said that I would just have to be in the plan for 3 years and pay whatever balance was left on the plan base. I asked if that was just for old law filers and he said no...that if I wanted to buy out early I could. (I would just need a lump sum of money after I have been in the plan for 3 years).

Hmm...I am really confused!

[liz417]

Hmmm...I haven't heard this one. This is still a grey area in most states/disticts since the BK Law changes in 2005. Maybe it's been done in your district, I curious....
This is great news if you had the extra $$

[Abbey]

I am one year into a ch 13 bankruptcy. I met with my lawyer today because I received a motion to dismiss because I didn't pay my state taxes to the trustee. (I thought I only had to pay the federal taxes over $1602) Anyway...I am all squared away with that...but while I was there I asked my attorney some things that I have been wondering. I asked the big question about early buyout....
He said that yes you can still buy out early and not pay 100%. He said that I would just have to be in the plan for 3 years and pay whatever balance was left on the plan base. I asked if that was just for old law filers and he said no...that if I wanted to buy out early I could. (I would just need a lump sum of money after I have been in the plan for 3 years).

Hmm...I am really confused!

early buy out is a bad idea imho trustee may see that as you have more income than i was told i'd better look over your case real close
cause lots of grief for you just stay the course my plan was 3 years i have two weeks left just stay the course, good luck

[justbroke]

I asked the big question about early buyout....
He said that yes you can still buy out early and not pay 100%. He said that I would just have to be in the plan for 3 years and pay whatever balance was left on the plan base. I asked if that was just for old law filers and he said no...that if I wanted to buy out early I could. (I would just need a lump sum of money after I have been in the plan for 3 years).

It's not going to happen. Ask him to name 5 cases in which a post-BAPCPA case actually bought out the plan early for less than 100% of the allowed unsecured claims filed.

The way he describes it, is exactly the pre-BAPCPA way of buying out a plan. That is, to be in it for 3 years, then payoff the "balance" of the plan. Unfortunately, no one has named one single case in which a post-BAPCPA debtor has bought out a case for less than 100% of the allowed unsecured claims filed.

Don't get us wrong... we are waiting for some precedence that one can do it. However, we have not one single case to reference.

What happens, when you pay off your case post-BAPCPA, the Trustee then blocks any motion to modify the duration of the Plan. So, you just paid off your plan and you're still in it for 5-years. This has been consistent and is the only precedence we have on this. Many lawyers have messed this up too. Specifically, the lawyers who attempted this for their clients, have asked the Trustee for a "pay-off" amount or balance (based on the Plan). Then they have their client pay that amount. Then the lawyer submits a Motion to Discharge. The Trustee objects (always) stating that they have to be in Plan for the plan life. The debtor loses a bunch of money.

This has been what we have consistently seen so far with these payoff cases.

If you can get your lawyer to oblige you and Cite 5 cases in your District in which this was allowed, I'll be happy to personally research them and tell you why it was allowed. (Kentucky may be one of the Districts that allows it, but we haven't heard any positive news.)

[holding on]

I agree with justbroke in the sense that you can browse this board all over and see situations where written stone bk law is subject to the whim of the trustees. Such as people paying 62,63,64 months into bk when the max is supposed to be 60.

My lawyer also told me I could buy out < 100% after 3 years. The last budgetary letter I received from the trustee even says you can buy out at 3 years. But with the new law I can easily see them saying tough luck continue your plan. oh and by the way we'll keep that extra disposable income you had.

[justbroke]

oh and by the way we'll keep that extra disposable income you had.

... and that has been the problem. They think your "payoff" is extra disposable income.