a developer is buying houses in our neighborhood and now, about 16 months into the plan, we have an opportunity to pay off our house and get out of the 13. we have a 67% plan, but our attorney said that because we've been paying for less than 3 years, we'd have to pay back 100%. i've spent the better part of the day searching for "prepayment penalties" for the 13, but can't find any information. i would like to know do we REALLY have to pay back 100%? i would think if the creditor has agreed to the 67% and we can pay off early, then the trustee would only make us pay off the balance owed under the 13, not the ENTIRE balance because it wouldn't be a dismissal, but a discharge. also, if we paid 100% back, we would be out of debt, but would have no money to put as a downpayment...and we NEED a place to live! we have everything written down as to what we need as a downpayment for a new house and the fact that we would actually be SAVING money because the new mortgage would LOWER than what we're paying in the 13 every month. would an option be to pay off the house and convert the rest of the 13 to chapter 7 and have THAT discharged? does the trustee have the option of dismissing a lien under the 13 if the house is paid off FIRST? HELP!
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Your attorney is right, the only way to shorten a plan to less than 36 months is to pay off 100%. The reason being is that you are required to devote all your disposable income into a chapter 13 plan for "at least" 36 months.
I don't know what your equity exemption is, but why not sell the house, keep the equity to put into a new house and continue making payments in the chapter 13.
What was the reason you filed a chapter 13 in the first place. -
repayment of chap 13
Hi,
I am refin. to pay off my chap 13 in Maryland. My lawyer has told me that even though I am over 3 years into my plan that the trustee will demand full payment of the original amount of my debt, if I borrow more then what I owe to refinance the mortgage and to pay the trustee what is owed in my repayment agreement. There is a 15,000 dollar difference. My loan guy said that he has never heard of this . Can any one offer some guidance? ThanksComment
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