Can you buy out of a Chapter 13?

[Pandora]

Aaak - I keep hearing this "no early out unless 100%" thing and for us - its not true according to our lawyer and Trustee.

We were told we could buy out after the 36 month mark due to 1. being under median when we filed, which resulted in what should have been 36 month Ch. 13 term; 2. Because we didnt have the $ required to pay in 36 months, our plan was taken out to 60 months due to assets we owned outright and desired to keep (vehicles, RV).

We are at 34% payback to our 2nd mortgage - our entire reason for filing 13 was to strip - yet we can pay off early, apparently. Our entire base plan was based upon the value of our vehicles because we wanted to keep them.

Confusing to say the least.

ETA: FWIW - we're not buying out early for the very reason i keep reading on the forum - "no early out unless 100%", regardless of what our lawyer and trustee say. how screwed up are WE that we listen to YA'LL over our lawyer and trustee? LMAO

[HHM]

Pandora

Our advice is directed to the people and circumstances asking the question.

You are correct, a BELOW median chapter 13 filer can buy out of a chapter 13 AFTER 36 months for the balance of the plan payment. However, until you chimed in, no one raised the issue. So, you are just needlessly complicating what is not really all that complicated. Reality, most chapter 13 are not below median.

The rule is:

Chapter 13, to buyout early, must pay 100% of filed claims and all administrative claims (basically, all claims).
As with any rule in bankruptcy, there is an exception....
UNLESS, the debtor is below median, then the debtor can buyout after 36 months for the balance of plan payments.

I am honestly not sure what is really so complicated about the above.

[spidge]

Thanks for your post Pandora, and for your patience HHM. I subscribe to the KISS method for simple minds, but there is no such thing in BK as each situation seems to be treated differently.
So just to add a little more complexity I am bellow median and elected to stretch our plan out to 60 months as Pandora had done. So it sounds like we could buy out, but maybe at a much higher price because we would have to pay all the claims at 100% and not the scheduled 3%. This would put it out of our reach, unless the line about being under median applies.

[Pandora]

Pandora

Our advice is directed to the people and circumstances asking the question.

You are correct, a BELOW median chapter 13 filer can buy out of a chapter 13 AFTER 36 months for the balance of the plan payment. However, until you chimed in, no one raised the issue. So, you are just needlessly complicating what is not really all that complicated. Reality, most chapter 13 are not below median.

The rule is:

Chapter 13, to buyout early, must pay 100% of filed claims and all administrative claims (basically, all claims).
As with any rule in bankruptcy, there is an exception....
UNLESS, the debtor is below median, then the debtor can buyout after 36 months for the balance of plan payments.

I am honestly not sure what is really so complicated about the above.

Not meaning to complicate the issue by any means HHM. I knew why spidge was asking because it was posted in another post we (spidge and I) were posting in and I just hadnt gotten around to answering.

Thank you for the clarification - I believe the issue becomes that 95% of the time, we (forum readers) always see "no buyout unless 100%" when in reality there are exceptions to the rule.

Spidge - ask your attorney regarding payoff early. It sounds like you are in the same situation we are in - below median filer / opt for 60 months vs. 36 due to payment.