Full Amount of Balance for a 13

[edbelfourno1]

Ok... Due to tax refunds, 1/2 of my bonus checks, and an unforunate passing of a grandparent (inheratance), I am on schedule to repay the full agreed amount of 44k in close to 36-38 months instead of the agreed 60 month schedule. Both cars will be paid off in (2) months. Yeah!!!! But, should I be worried? I have seen posts in other forums talking about how not to payoff early in a 13. Any help would be greatly appreciated. We are hoping for great news, but don't want to get our hopes up to high... Thanks

[kjrmom911]

Are you in a 100 percent repayment plan?

[lrprn]

@edbelfourno1, when you say, "I am on schedule to repay the full agreed amount of 44k," did your lawyer tell you that you would be paying back 100% of your unsecured debt for all creditors/collectors who filed claims by the end of your plan? Or is the $44K going to pay back only part of what you owed to non-secured creditors/collectors who filed claims?

We need to know this in order to answer your question about early payoff.

[edbelfourno1]

We were scheduled to pay back 100% of the secured and 10% of the unsecured debt. In the 36-38 month range we will have paid the 44K that was agreed upon in the settlement. Any ideas what may happen if this does occur?

[forgotten]

We were scheduled to pay back 100% of the secured and 10% of the unsecured debt. In the 36-38 month range we will have paid the 44K that was agreed upon in the settlement. Any ideas what may happen if this does occur?

The only way to actually pay off the case early is to pay 100% of your unsecured debt back as well. The extra you had to pay in to the plan from your tax refunds, bonus, and inheritance is unfortunately just extra money for the unsecured creditors. You will still need to make your scheduled payment for the entire 60 months or until 100% of the unsecured claims are paid back (not just the 10% the plan called for at the beginning).

[kornellred]

Bottom line - there is no getting out of a Chapter 13 early unless you pay off 100 percent of your unsecured debt, plus all of the other secured and priority debt stipulated amounts.

[woeisme]

try to see if you can get any of the inheritance or other bonus exempted, i.e. not going to the trustee/creditors. Have you had any new expenses crop up? home repairs that are desperately needed? changes in circumstances that are negative to offset some of the positive increases in income? Work with your lawyer to see if you can get to keep any of this $ since as the others have noted, unless it can be used to buy you 100% out of all your secured AND unsecured debt, it just ups the % that goes to unsecured, doesn't end your CH 13 sooner.

[lrprn]

Keep in mind that not only do you have to pay back 100% of your unsecured debt, you also have to have made three full years of on-time payments as well. That's the point that most trustees will consider a request to pay off before your five years or 60 payments are done.

The only exception is for filers who have Ch 13 plans designed to pay back 100% to their non-secured creditors from the start. In that rare case, then it is possible to shorten your Ch 13 plan's length by paying more into it. But you have to work with your lawyer to make that possible.