Early Payoff

[OverThisCh13]

Here is my situation. We are in month 51 of a 60 month plan at $1018 biweekly. My student loan balance will survive the plan. My finances have changed and I am now barely surviving and paying the utilities etc. I have gotten approved for a mortgage refinance that will pay off the Ch 13. I asked my attorney to get me the payoff amount, without having to pay off the total student loan amount in the process. My attorney requested the payoff from the trustee and was told that to do it without the student loan payoff amount, we had to object to the student loan claim and go to the judge. That took a month. We get before the judge and he says that my attorney didn't serve adequate notice on the Dept of Education because they didn't show up, so he denied the objection. My attorney re-served the Dept of Education and got it back on the docket. That took another month. We get before the judge again and he says that this is an issue we have to work out with the trustee. My attorney told the judge that the trustee said we had to go before him, and the trustee said she didn't remember saying that. Objection denied again. Now after more than another month, and the trustee asking for the mortgage application and good faith estimate 2 weeks ago, we are still waiting on the payoff. My attorney now says that all we are waiting on is the trustee to sign off on it. If it was that simple, why has it taken more than 3 months since I first asked for the payoff amount. Has anyone experienced this before? I am SO FRUSTRATED that I am at the point of getting it dismissed and I will fight things out with my creditors and the hell with the trustee. I am so tired of living like a pauper for the past 4+ years and I cannot finish the last 8 months. Stupid question, but does the trustee get paid a commission on the plans she administers? Wouldn't it be better for someone to pay off the plan early if possible and the trustee knows the creditors are getting paid, rather than someone failing in the plan and getting it dismissed? I am so fed up with this bankruptcy!

[HHM]

Come on, you only had 9 months to go. The simpler path would have been to simply amend your plan to account for the changes, or ask for a hardship discharge.

[StartingOver08]

Sounds like something else is going on that the OP would be in that much of a rush when he is so close to finishing!

Yes, the Trustee gets a commission.

[Flamingo]

The trustee gets the same commission indicated in your confirmation whether or not you buy out early. As someone who has gone through a Chapter 13 and also bought out early (for good reasons - needed a new roof and major window repairs), since you are so close to the end of your plan and it seems the only reason you have is that you are just tired of living like a pauper, bite the bullet and make it to the end. You will have to pay extra for a Motion to buy out early and, as you can see, something like this with a refinancing and the trustee and judge involved, takes time. We started our buyout investigation as to refinancing in September 2005; we closed in April 2006. Just the Motion itself for approval took almost two months to get scheduled.

Whatever you do, do not stop paying. Do whatever you need to do to make it to the end cause if you let it go now, all the hard work and effort you have done to get this far is tossed right out the window.

[OverThisCh13]

The only thing going on is that our budget was so close and with the costs of everything we have to pay monthly, utilities, gas, groceries, healthcare, etc, we are even more strapped that when we started. We have medical issues and maintenance on the home that is in desperate need that we cannot let go any longer.
As for a hardship discharge, our attorney says this is not a viable option. Our only creditors are the mortgage company that has to be paid off by the plan due to a cramdown, some IRS taxes that are not dischargeable, and the student loans that are not dischargeable and survive the plan. So our attorney said there is no room in our plan to amend it to get the payments lowered. Our attoenry keeps saying that we should have the payoff approval in a few more days, a few more days, a few more days. Our payments are taken out of my pay, so I have no choice but to keep paying till it is dismissed or paid off. My mother has been helping us out financially as much as she is able, and now is as tapped out as we are. I'm over this!

[HHM]

Then you need to finish.

[Flamingo]

We all do what we gotta do and you have already made up your mind as to your situation so no matter what anyone states, you will still do what you feel you need to do. Everyone's situation is different. It is also going to take time for the refinance process, paperwork approval by the trustee and closing/settlement. By the time this is all finished, another few months will have passed putting you that much closer to the end of your plan. But I know where you are coming from as to feeling the way you do. Keep that feeling in mind before you sign on the dotted line for future credit cards or loans...And whether you know it or not, going through a Chapter 13 has taught you quite a bit as to budgeting and money and hopefully you carry that on in the years to come. Best of luck to you.

[OverThisCh13]

Well, our patience (or lack of it) finally paid off. We got the payoff letter from the trustee last week and got it to the mortgage broker we are working with, the mortgage is a go so far, and we are just waiting to get a closing date for the re-fi. We are told that closing will be Tuesday or Wednesday. A few more days and this will be behind us once and for all. Our bankruptcy payment of $1018 biweekly will be reduced to $383 monthly mortgage payment. I think I see some light at the end of this long tunnel, and it just MIGHT not be an oncoming train.

[OverThisCh13]

Update...

We go to closing on our refinance to pay off the Chapter 13 tomorrow. This will finally be over and we can start getting on with our lives that have been on hold the past 4+ years.

[woeisme]

Congratulations! I know patience was hard, glad you got through it. Another successful CH 13! That is such a small crowd, that you should be proud of making it through. Can't wait for the day I join you!