Amend Chapter 13 plan 21 months in

[jl37]

Good morning,

I'm now success fully 21 months into a 60 month 100% plan. I included my students loans within the plan for 26K at the time. The trustees office has paid about 7K at this point but of course with 4.10 per day of interest the balance is not going down as I expected. In any case is it feasible to amend a plan this far into the process to remove the student loan from the overall plan payment and just pay the interest monthly outside the plan. I believe I know the answer and have emailed my attorney as well but I figured I would throw it out there.

Thanks in advance

[LadyInTheRed]

Whether you can amend your plan for that purpose, I can't tell you. But, I don't think it's a good idea. You are going to have to pay your attorney to amend the plan. Better to have the money go to pay off your student loans then to pay your attorney. Besides, I think there is more principal being paid down than you think.

You say you are paying 4.1% per day interest on the loans. I really doubt that is true. That would mean you are paying 1596.5% per year in interest. It's probably 4.1% per year, compounded daily. I used an online compounding interest calculator and that comes to $1,088.09 interest a year or $90.67 per month. It sounds like the trustee is paying $333.33 per month to your student loans. At that rate, you'll pay off over $14,000 in principal during your Chap 13. You'll come out of your 13 much further ahead than if you pay interest only.

[justbroke]

If the Trustee is already paying X and you want to have Z paid each month, then just send Y in separately!

Additionally, as my lady friend explained quite well, interest is compounded daily. When you are first paying off a loan, a large portion of the payment typically goes to interest over principal. We all wish it were the other way, but even with 0% interest, you'd still be paying $433.33/month to pay off your student loans ($26K) in 60 months.

The nice thing is... it looks as though you'll put a big dent in your student loan balance by the end of your Chapter 13. That's no small feat.

[jl37]

Thanks. I kind of came to my senses after posting this question :-)

The trustees office has been paying roughly 450.00 per month to my student loans. I was on a graduated plan paying only about 130.00 all interest. My final payment would have been about 300.00 per month outside the plan but would have gone on for about 15 years. So it seems that i'll probably only owe perhaps 5 to 7k when done :-)