We are in our last year of Ch13 with approx. 22,000 due at payoff (balloon payment). If I start to make extra payments (picking up another job) of say 1,000 a month can I say what it should go to? We have back taxes on the house, a car ($6,000 left), a secured loan - I think (5,000) and the rest unsecured. This year we will pay 13,00 into our plan. Should I pay ahead or put in an account and not touch it till time to make the payoff?
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Unfortunately when the current bk law was written and passed by Congress in 2005, the option for an early payoff in Ch 13 was not included. That left each local court to decide how to handle early payoffs.
So far here in the forums in the last few years with cases filed since October 18, 2005 when the current bk law went into effect, we haven't seen a single case of early payoff allowed unless the filer paid 100% of unsecured claims and any other arrears included in the plan to pay off by the end of the plan.
You need to talk with your lawyer to see what the possibilities are in your local court with your trustee. Just don't be surprised if you find out an early payoff isn't possible unless you pay 100% back to your non-secureds and pay off the taxes in full as well.I am not a lawyer and this is not legal advice nor a statement of the law - only a lawyer can provide those.
06/01/06 - Filed Ch 13
06/28/06 - 341 Meeting
07/18/06 - Confirmation Hearing - not confirmed, 3 objections
10/05/06 - Hearing to resolve 2 trustee objections
01/24/07 - Judge dismisses mortgage company objection
09/27/07 - Confirmed at last!
06/10/11 - Trustee confirms all payments made
08/10/11 - DISCHARGED !
10/02/11 - CASE CLOSED
Countdown: 60 months paid, 0 months to go -
what if it was a 100% plan from the start?Ch 7 filed 8/15/11 341 9/22/11 Discharge 11/28/11
The rebuilding begins
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100% payoff
We wont be able to pay everything off early (we are hoping to be able to pay the entire balloon but that may be a problem). With another job added so we can make that balloon payment at the end I was wondering if we sent in an extra payment should we say its for the car, the taxes or just let them pay what they put it towards. I guess I was wondering if after 5 years some unsecured is not paid? or is it 100% all paid with a Ch13.Comment
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If you're not in a 100% payoff plan, then I think your best bet is to save up $22k in cash to pay off the balloon payment when it comes due rather than trying to make extra payments now. You don't want to risk them simply paying more to unsecured and then still demanding the balloon payment at the end...Filed Chapter 13 on 2-28-10. 341 completed 4/14/10. Confirmed 5/14/10. Lien strip granted 2/2/11
0% payback to unsecured creditors, 56 payments down, 4 to go....Comment
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That is what I thought, if its 100% it would help with interest on taxes and car but would not help the balloon payment. Are some ch13's not 100?Comment
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I would think that most Chapter 13's are not 100 percent.Chapter 13 Filed November 10, 2010
Indiana - Southern District - United States Seventh Circuit
Attended 341 hearing 12/15/2010Comment
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