early repayment of chap 13

[merilun]

Hi,
I have a chap 13, 5 year repayment plan in Maryland. I am over 3 years into the plan and want to refinance my home . My lawyer tells me that if I refin. more than my mortgage and the remaining plan payment that the trustee will require that I pay back the original amount of my debt which is a difference of 15,000 dollars. The company I am refin. with tells me that they have never heard of anything like this, and that after 3 years it should not be a problem. Can you give me some advice? Thank you.

[HHM]

What was the purpose for being in a 5 year plan vs a 3 year plan?

[merilun]

I don't recall being offered a three year plan, the five year plan is what my attorney set up for me. thanks

[HHM]

Generally, there is some reason to be in a plan for 5 years since your requirement under a chapter 13 is devote your disposible income for 36 months to the payment plan. The common reasons for having a longer plan is that you are trying to get caught up on back payments on a secured debt, like a house or car, or you have substantial priority debt, like IRS taxes, that you can't pay off in 36 month;. However, if you have been in your plan for 36 months, and your secured and priority claims have been paid, there is no reason you shouldn't be able to get out of it.

[merilun]

I was behind on my house payments, but the question is :will I still be liable for the 15,000 in debt that was forgiven under my plan if I borrow more then the amount actually needed to pay off my mortgage and the remaining amount due under my plan?
Sorry if I am dense. Thanks

[therock48880]

that seems ridiculous. you may have to pay 100% of what you still owe but they can't make you pay for what you have already paid for. we re-fi'd out of our 13 and had to pay 100% of what we still owed even though we were in our 40th month. i think lawyers tell you things to scare you away from making them do more work. ours tried it but we called the trustee's office and they were very helpful. i know a great lender if you need one.