Does anyone know if a personal chapter 11 can be paid off early? If the original payment plan is set up for five years, can it be paid off earlier? I know there are restrictions in a ch13 that state that it can only be done if the unsecured creditors are paid off at 100%. I did not see any similar restriction in a CH11. Do you know if any apply? I hear frequently about companies existing chapter 11 early, wondering if the same can be done for individuals. I am sure the compaies were not paying off at 100%!! Would love to know for sure.
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It will depend on what the Chapter 11 Plan, any objections to the Plan and what the Confirmation Order state. In the Chapter 11 if an unsecured creditor objects to the Plan an individual must pay his/her "projected disposable income to be received during the 5 year period beginning on the date that the 1st payment is due under the plan. . ." (11 USC 1129(a)(15)).
Since Congress left in the word "projected", in theory, once you have paid the projection, you can shut down the case. This is the way we handled 13's in the good old days. While this is no longer an option in a 13 our 11 Plans do specifically state that once all of the "projected disposable income" has been paid the Plan is deemed completed and a Discharge can be entered.
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