Paying off 13 early

[dieselman]

I've been in a 13 for 39 months now. Been saving what I can nickel by nickel and eating beans and rice and top ramen noodles. My attorney got my payoff quote amount and I have that cash available plus would have a cushion. I have a good paying job and not concerned about it going away (knock on wood). I just want to get out from under the 13.... No mortgage involved. Just truck is secured and $1600 in tax debt. Not in a 100 percent plan, everything else is non secured credit card debt. Anyone have experience with this?

[justbroke]

Welcome to BKForum. I have no experience with buying out my plan. I assume that you were under-the-median and the Trustee offered you to buyout your plan based on the current Plan Base. Hopefully someone else that has paid off a Chapter 13 Plan comes along.

[shipo]

I've been in a 13 for 39 months now. Been saving what I can nickel by nickel and eating beans and rice and top ramen noodles. My attorney got my payoff quote amount and I have that cash available plus would have a cushion. I have a good paying job and not concerned about it going away (knock on wood). I just want to get out from under the 13.... No mortgage involved. Just truck is secured and $1600 in tax debt. Not in a 100 percent plan, everything else is non secured credit card debt. Anyone have experience with this?

I asked similar questions of my attorney and her advice was very specific, "Unless you're in a 100% plan, or unless you have enough to pay every dime back plus Trustee and Attorney fees, don't rock the boat." Her reasoning was, if the Trustee finds out you have spare disposable income, he or she may well opt to bump up how much your plan pays back over the 60 months.

[dieselman]

I asked similar questions of my attorney and her advice was very specific, "Unless you're in a 100% plan, or unless you have enough to pay every dime back plus Trustee and Attorney fees, don't rock the boat." Her reasoning was, if the Trustee finds out you have spare disposable income, he or she may well opt to bump up how much your plan pays back over the 60 months.

I have enough to pay the remaining trustee commission, attorney costs, and all secured debt.

[Franco]

I have enough to pay the remaining trustee commission, attorney costs, and all secured debt.

Yes, but the Trustee can have that extra money go towards the unsecured debt for the remainder of the plan. The unsecured debt is the issue I believe, the Trustee can be a prick and say "ok, now xxxxdebt gets $400 a month vs the current $100 a month". Better off just finishing your plan and saving your $$$ if you have it.

[dieselman]

Yes, but the Trustee can have that extra money go towards the unsecured debt for the remainder of the plan. The unsecured debt is the issue I believe, the Trustee can be a prick and say "ok, now xxxxdebt gets $400 a month vs the current $100 a month". Better off just finishing your plan and saving your $$$ if you have it.

I think i'll follow my attorneys advice. He the one with the degree in law and has practiced bankruptcy law in my state for 26 years. He says it ok to pay. He knows the trustee, random people on the internet with internet law degrees don't.

[justbroke]

dieselman it is typical that a Chapter 13 Trustee would want 100% of the allowed unsecured claims to be paid. This is usually the case when an over-the-median debtor asks for a payoff and they are not already in a 100% plan. If the Chapter 13 Trustee does offer an early payoff, it is usually because the debtor was "under-the-median" when they filed and at least 36 months has elapsed.

The 36-months is significant because that's the minimum amount of time required to be in a non-100% plan. It's just not typical for an "over-the-median" debtor to be able to payoff a Chapter 13 Plan with only the base plan amount, when it's not already a 100% plan.

Because your Chapter 13 Trustee provided a quote as to the amount necessary to payoff the Chapter 13 Plan, and your attorney concurs, then you should rely on that quote. It is the Chapter 13 Trustee's job to make sure that you pay what is necessary.

Franco was likely referring to situations where a debtor arbitrarily sent in $$$ in an attempt payoff the Plan Base without consulting their attorney and/or obtaining a payoff quote from the Chapter 13 Trustee. Differences between districts, specific Chapter 13 Trustees, and the debtor's specific case can also make a difference in what the Chapter 13 demands for payoff.

I know that we don't see plan payoffs that often here on BKForum. Even a recent member had a large windfall from an inheritance, and that was not enough to payoff the Chapter 13 at 100%. They do happen, otherwise every Chapter 13 Trustee that I have known or visited their website would not have a payoff request link or form.

I like to say that each Chapter 13 Debtor is unique. Being able to get out early is uncommon and I applaud you for being able to make that happen.

[Franco]

I think i'll follow my attorneys advice. He the one with the degree in law and has practiced bankruptcy law in my state for 26 years. He says it ok to pay. He knows the trustee, random people on the internet with internet law degrees don't.

I hope it works out for you.

[despritfreya]

I have not read through the comments, so maybe this has already been stated:

If you were under median income your commitment period is 36 months even if your Confirmed Plan goes beyond that. There should be no issue with you providing payment of the balance of the Plan base (including the turnover of tax refunds, if required) in month 39, 40 etc. since you have met the commitment period.

If you were over median income your commitment period is 60 months and, in general, you cannot finish payments early unless you pay 100% of all allowed claims.

Des.

[dieselman]

I have not read through the comments, so maybe this has already been stated:

If you were under median income your commitment period is 36 months even if your Confirmed Plan goes beyond that. There should be no issue with you providing payment of the balance of the Plan base (including the turnover of tax refunds, if required) in month 39, 40 etc. since you have met the commitment period.

If you were over median income your commitment period is 60 months and, in general, you cannot finish payments early unless you pay 100% of all allowed claims.

Des.

Thank you for your answer.

I am under the median, turned over very small tax refunds and have met the 36 month commitment period.

[dieselman]

dieselman it is typical that a Chapter 13 Trustee would want 100% of the allowed unsecured claims to be paid. This is usually the case when an over-the-median debtor asks for a payoff and they are not already in a 100% plan. If the Chapter 13 Trustee does offer an early payoff, it is usually because the debtor was "under-the-median" when they filed and at least 36 months has elapsed.

The 36-months is significant because that's the minimum amount of time required to be in a non-100% plan. It's just not typical for an "over-the-median" debtor to be able to payoff a Chapter 13 Plan with only the base plan amount, when it's not already a 100% plan.

Because your Chapter 13 Trustee provided a quote as to the amount necessary to payoff the Chapter 13 Plan, and your attorney concurs, then you should rely on that quote. It is the Chapter 13 Trustee's job to make sure that you pay what is necessary.

Franco was likely referring to situations where a debtor arbitrarily sent in $$$ in an attempt payoff the Plan Base without consulting their attorney and/or obtaining a payoff quote from the Chapter 13 Trustee. Differences between districts, specific Chapter 13 Trustees, and the debtor's specific case can also make a difference in what the Chapter 13 demands for payoff.

I know that we don't see plan payoffs that often here on BKForum. Even a recent member had a large windfall from an inheritance, and that was not enough to payoff the Chapter 13 at 100%. They do happen, otherwise every Chapter 13 Trustee that I have known or visited their website would not have a payoff request link or form.

I like to say that each Chapter 13 Debtor is unique. Being able to get out early is uncommon and I applaud you for being able to make that happen.

Thank you.

It was difficult. But its possible to do. I originally planned to start saving for a small emergency fund.