Chapter 13....Can I pay off my plan early (100% Payback)

[Flying2BK]

Hello to all!

I used the search function and still not able to get a clear understanding.

I am currently in a Chap 13 plan. I am a 100% payback, not all my unsecured filed, I gave up my house (the real reason to file in the first place)

I am in year 3 of a 5 year plan and am curious if I owe say $19,500 can I pay this off early and get discharged early?

I have found much better employment and am making 200% more income than when I filed. My trustee payment is $850 a month. I feel I can save enough with my new higher paychecks to be able to make the total payoff amount in about 4-5 months.

....for the lurkers out there I kept 2 boats, had a Corvette that I bought before I filed, and the plan is working well for me. I didn't have that much Credit Card debt but the job transfer and house mortgage is what led me to file. I was in a very low paying job but now after a few years I found much better employment with a much greater income. I have learned a lot on how to live on a Cash only basis. It is amazing to see my new paycheck and saving a lot of money and not wanting to go spend it all !

I will go talk to my Attorney (but I am not that impressed with him as I learn much more on this forum) so again.....if I am a 100% payback can I get this over with more quickly? Will there be any other fee's that I might have to pay above and beyond the 100% payback amount?

I appreciate all the input and replies.

[HHM]

Yes, since you are in a 100% plan, you need only pay the plan balance. For others reading this post, the rule is, to payoff a chapter 13 plan early, the debtor must pay 100% of "approved" claims. (there are some exceptions for below median debtors, but that is a different topic). So for example, let's say the total of approved claims is $30,000. And you are paying $250 per month, a 50% plan ($15,000). Let's assume you are at month 36. You would have paid $9,000. To buyout early, this debtor would need to pay $21,000, the balance of approved claims, not the balance remaining on the plan $6,000.

The process is fairly straight forward, you request a pay off from the chapter 13 trustee, pay it. A 1-3 months later, you have your discharge and the case closes.

[Flying2BK]

HHM....many thanks for your reply. I have enjoyed reading your posts. It helps!

[goon]

Just to add to what HHM said the only additional piece is the Trustee's fees (usually a % and varies by district). So your payoff amount would be slightly more than the remaining balance of the approved claims. When you get to that point your lawyer ( or yourself) can get a payoff amount from the trustee which would include his fee.

[Flying2BK]

Thank you goon!

Is there any advantage to staying in the program? I would think not, I can pay this off and start to rebuild my credit and get all this behind me?

[goon]

Thank you goon!

Is there any advantage to staying in the program? I would think not, I can pay this off and start to rebuild my credit and get all this behind me?

The only downside that I can think of in that situation is that if something happened between now and when you would have been done such that your income drops, in theory your payment could drop and you could end up paying less than the 100%.... but if I was in that situation where I was going to pay 100% anyway and could pay it off early, I would just to be done.

[Flying2BK]

One more question (Attorney has not called me back yet). I keep hearing about the 36 month mark, is it possible to payoff earlier then 36 months of a 60 month BK? In other words I was reading that most trustee's would want you to wait until the 36 month until making a payoff? Not sure if that was bad gouge or info but wanted to run it by the forum.