100% Payback Will Be More Than the Amount Owed minus student loans

[cbmmom5]

Hello
The total amount I will pay after 5 years will be $72720 (montly payments + estimated tax refunds.) The total amount of my debts on claims submitted, minus my student loans is only $41576. My question is will I get to end my chapter 13 early? I am not talking about paying my plan by a big chunk of money, just by montly payments and tax returns. I know that my student loans will not be discharged and will simply be treated lilke a regular unsecured clain, but will I need to keep paying my monthly payment for the next four years eventhough my submitted claims will be payed or will I need to keep going for the whole five years? I know by student loans will pick right back up.

Thanks
Connie

[HHM]

If your not paying student loans in your plan (you probably are, you just don't know it), you are not 100%. Student loans get paid their pro-rata share along with other unsecured creditors (assuming a proof of claim is filed).

However, if all approved claims are paid prior to the end of the 5 years, then yes, you will get out early (so to speak). It is usually advisable to submit a Proof of claim on behalf of the student loan servicers if they don't file one on their own so that they get some money.

[cbmmom5]

Hi HHM. Just to clarify, My student loans are in my plan. Although I am comfirmed, my trustee has not made any payments yet. I am not sure I understand when you state that I am not in a 100% pay back. That is what we were set as. My student loans are $96,000 and never could be paid in full in my payback plan. My pay back total amount + estimated tax returns will result in me being over my debts - student loans by $20,000.

Thanks

[HHM]

Then it sounds like your attorney, and or district, allows student loans to be treated as a different class than general unsecured creditors (class IV). Generally, if a proof of claim is filed, student loans will get paid a dividend along with your other class IV creditors (i.e. credit cards, lines of credit etc). If so, then you will be in the plan all 5 years.

So for example, if your plan payment is $1,100 per month and you have $40,000 in credit cards and $60,000 in student loans, and all creditors file proofs of claim, after trustee fee, your credit cards will get $396 and the student loans would get $594. Now, when they actually get paid will vary, but I just wanted to illustrate the point.

[cbmmom5]

I am sorry I am being an airhead on this. I just want to get it for sure. It will be a good thing if they are given priority status like you said above. Even with that status it will take well beyond five years to pay them off. Considering my other debts will be paid off but my student loans won't be, will I need to keep paying the amount of my plan for the remaining years or will I get out early? Thanks again for your responses Connie

[HHM]

You need to look at your actual chapter 13 plan to know for sure. Not, I said "different" priority, not actual priority.

Generally, your other creditors will NOT be paid in full because the student loans are getting their fair share. So you will be in the plan for 5 years, your student loans will get some money, your other creditors will get some money. any remaining balances owed to dischargeable debt will be discharged, you will start repaying any balance remaining on your student loans after the plan is complete. My sense is, your attorney really hasn't actually explained what is going to happen in your plan, and to be honest, it really doesn't matter that much because it doesn't affect the monthly payment, so who gets paid and when is largely irrelevant from your perspective. Or, your attorney is in idiot (probably 50/50)

[cbmmom5]

Thank you very much for explaining this. At least my student loans will be getting paid.