Has anyone successfully paid off plan at year 3 vs going all 5 years?

[Anonymous]

When we filed Chapter 13 back in 2014, our attorney mentioned that our trustee may allow for us to pay our remaining plan payments (not at 100%) at the end of year 3 and discharge our bankruptcy.

I have reached out to the attorney and he is confident in trying to do this for us at the end of this year (3 year mark). Knowing what we did when we filed, I have been pulling money together to have the remaining 2 years of payments saved by the end of this year.

I am wondering if anyone has succesfully done this? Was it a smooth process? How long did it take? Did the Trustee ask for any additional information?

Thanks!

[pizza1]

Hi lesson....

Ive noticed that you havent  had any responses yet to your question, so I bumped your thread up to the top in hopes that someone will see it, and can answer your question.

Not too many Chap 13's around here, mostly 7's. Good luck, and welcome to the forums.  Mine was a 7, so I cant help you out either.  

[Anonymous]

My personal experience with a 13

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lessonlearned2014 wrote:

When we filed Chapter 13 back in 2014, our attorney mentioned that our trustee may allow for us to pay our remaining plan payments (not at 100%) at the end of year 3 and discharge our bankruptcy.

I have reached out to the attorney and he is confident in trying to do this for us at the end of this year (3 year mark). Knowing what we did when we filed, I have been pulling money together to have the remaining 2 years of payments saved by the end of this year.

I am wondering if anyone has succesfully done this? Was it a smooth process? How long did it take? Did the Trustee ask for any additional information?

Thanks!

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I paid off early, and it was not a difficult process, and was resolved quite quickly and easily.

* I did Pay in Full.

I notice that you are scheduled to pay over 5 years, but not in FULL?

My understanding, and I can be wrong, is that one either pays in full, or a percent over time (all they can manage) on a scheduled system.

If one is paying over time at less that the full / 100% amount they owe, and they want to pay off early, it will be at the Full DEBT, not a reduced amount.

Again, I could be wrong, but the design of the program is that the debt is paid off in full, unless you do not have the means, in which case it would go the full term.

* the Biggest question you will face is where the money is coming from, and WHY is it that your Creditors don't deserve to be paid?

The Trustee is there as a Representative of your Creditors to get they reimbursed, and made as Whole as possible.  Can't imagine why he would approve.

Best Wishes!!!!

.

[Anonymous]

I've been reading the forums for ever and decided to finally register and reply.

With paying off the bankruptcy early, it is very easy to do as long as your plan does not restrict it. Generally there is a base plan amount that must be paid in full before the Ch13 Trustee will declare plan paid in full.

Generally the base amount consists of your total allowed claims, allowed claims are limited to the dividend as set out in the plan.

So as long as your plan sets a base amount that is equal to all your payments your good. I cimplementation my Ch13 in 21 months.

On the technical side, once the bk is paid, on the law the bankruptcy must discharge in a reasonable amount of time. Sometimes the trustee gets pissed when you pay early and want to force you to remain in the plan or modify it pay above what your plans calls for. Here, if it were me, I'd pay it all off asap before telling the trustee your plans. This will not only avoid the above issue, it ties both the trustee and courts hands, the plan was paid before the trustee balked aND suddenly he/she has no staning to force modification.

Standing is everything, pay off if your plan does not specifically prevent it and you should be done. I'm not a lawyer and you should talk to yours about this and shop arrounder if he says no.

[Anonymous]

I am going thru CH 13 right now and will be paying 100%. My question to you is why pay it off early as you should be paying no interest on unsecured debt and minimal interest on secured. That money would work better for you by investing it. Its what I plan on doing. In general you cant pay off early unless you repay 100%.

[Anonymous]

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@Anonymous wrote:

I am going thru CH 13 right now and will be paying 100%. My question to you is why pay it off early as you should be paying no interest on unsecured debt and minimal interest on secured. That money would work better for you by investing it. Its what I plan on doing. In general you cant pay off early unless you repay 100%.

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Technically you should not have any "extra" money while in a Chapter 13 and all excess money should go to the creditors.  I'm sure this sounds good on paper but it doesn't always work that way.  If the trustee doesn't require your tax refunds you can keep those and invest those or if you get a raise/bonus and they don't adjust for that based on your tax papers you can then use that money as you see fit.  As long as the trustee is happy you usually don't have anything to worry about.  Though the Judge could feel diffrenetly when it comes time for a discharge.

As for paying if early you have to be careful becuase if you show you have extra money they might want to alter your plan and have you pay more into it if you are not doing 100% and are doing a percentage of your debts.  I would talk to your laywer and see what they say about this.

[Anonymous]

It may differ state to state, but I was told that once I made my 36th payment (of 60), I could pay the balance of the base plan and request for discharge. That is my goal and I will be making the 36th payment in November.

I'm also curious how the process went considering I do not have the upmost confidence in the attorney I have now.

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

I am going thru CH 13 right now and will be paying 100%. My question to you is why pay it off early as you should be paying no interest on unsecured debt and minimal interest on secured. That money would work better for you by investing it. Its what I plan on doing. In general you cant pay off early unless you repay 100%.

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Technically you should not have any "extra" money while in a Chapter 13 and all excess money should go to the creditors.  I'm sure this sounds good on paper but it doesn't always work that way.  If the trustee doesn't require your tax refunds you can keep those and invest those or if you get a raise/bonus and they don't adjust for that based on your tax papers you can then use that money as you see fit.  As long as the trustee is happy you usually don't have anything to worry about.  Though the Judge could feel diffrenetly when it comes time for a discharge.

As for paying if early you have to be careful becuase if you show you have extra money they might want to alter your plan and have you pay more into it if you are not doing 100% and are doing a percentage of your debts.  I would talk to your laywer and see what they say about this.

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You are technically correct if your plan doesnt involve 100% repayment. In my case it does so I dont have to give the trustee all of my extra income. I just have to give enough to repay 100% in 5 years which is around 1300 a month

[Anonymous]

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@Anonymous wrote:

It may differ state to state, but I was told that once I made my 36th payment (of 60), I could pay the balance of the base plan and request for discharge. That is my goal and I will be making the 36th payment in November.

I'm also curious how the process went considering I do not have the upmost confidence in the attorney I have now.

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Bankruptcy happens in federal court. There are some differences between states but In the xtensive research I have done the only instance were the trustee should allow early payoff is at 100%. If you have a 5 year repayment that means you made above the median and failed the means test. Sounds like you have a **bleep**ty lawyer. Was he on the cheaper end of the spectrum or was he more expensive. I paid more for mine but she had alot of experiance in ch 13 where alot of attoneys only practice ch 7

[Anonymous]

Yikes! I knew I was opening up this question to the masses but jeez there are quite a bit of judgments being thrown around here.

Going back to what I was asking, I didn't see a post with anyone who had successfully paid off their plan, not at 100%, early.

Lmg702 I would interested in hearing how the process goes for you in November. Good luck!!