Early Buy-out

[wgibson]

How does an Early Buy Out work?

[lrprn]

How does an Early Buy Out work?

It depends completely on when you filed your Ch 13.

If you filed BEFORE October 17, 2005, after making on-time payments for a specified number of years, then you can contact your lawyer and ask to find out from your trustee what your early buy-out amount is. If you can come up with that much cash in a lump sum, you pay it to your trustee, your trustee audits your case, and you are discharged with a successful Ch 13 completion within a few months.

However, if you filed AFTER October 17, 2005, then thanks to the new bankruptcy law that went into effect then, the buy-out rules are completely different. First of all, the early Ch 13 buy-out option was removed from the new law, so that now each district - sometimes each local court - makes up their own rules for early buy-outs. Currently all the case law across the country regarding early buy-outs from Ch 13 have the filer able to get out of their plan early ONLY if you pay back 100% to all unsecured creditors that filed claims. This makes an early buy-out unlikely for most Ch 13 filers.

You need to talk with your lawyer to find out if your local court is allowing early buy-outs and what the requirements and timeframes are.