Question on early payoff

[patieboy38]

Hi all,
Im in NJ , 48 months into my 13. My plan has a lien strip / cram on my 2nd. My plan base has approx 30K remaining and all claims (excluding 2nd as they didn't file a POC) has a balance of approx 160K. SO approx 130K will be discharged after the plan. My home now has appox 140K in equity and If I refinanced at LTV of 80%, I can cash out 55K Approx so I am wondering if I can payoff the plan base a year early - 30K and the balance of 25K is exempt (federal exemption of $22500)?
Will the trustee look to go after the additional 20% equity ? Im sure it's a question for atty but thought I'd lob it out.

[kornellred]

The only time you can pay off a Chapter 13 early is when you can pay 100 percent of what you owe, which does not necessarily mean simply paying off the balance of the plan base. Check with your attorney.

[becky20]

That is my understanding as well - you would have to be in a 100% payback in order to pay your plan off early.

[kmjatl]

I would discuss this with your attorney before drawing attention to the TT that you have any kind of equity in anything. You have to get permission from the trustee in order to obtain any kind of credit.

[patieboy38]

Thanks all..

[NowImDownInIt]

You don't necessarily have to BE in a 100% plan, but to pay off you have to be prepared to *pay* 100% of your debt... the claimed amounts. There are ways to get around this with SOME trustees.. My trustee for example would take smaller extra payments (usually around tax time), upwards of $1000 to $2000.. I can't remember exactly what it was, but in the paperwork I was provided at the beginning of my plan from his office stated that these kinds of payments would serve to shorten my plan.

[Pandora]

There are exceptions to every rule: When we filed, we qualified for Ch. 7 and were under median; we chose Ch. 13 to strip our 2nd (entire reason for filing). Our trustee extended our plan from 36 months (under median filers generally do 36 month payback) to 60 months due to income / assets we chose to keep that were paid. We can now pay off at any time (must be in plan for at least 36 months to do so) and not pay 100% of claims.

So - it really depends, but generally yes, you must pay 100% of claims.