Those of you who paid BK off early??

[Pumpkin729]

I've search high and low for answers, ideas, comments, etc. Just when you think you have the answer to your questions someone pops up with a different answer. Then, you're right back where you started at and more confused.

For those of you that have already paid off your BK can you help us out with some answers here?

1. How long were you into the BK when you paid off early? Was it before or after the 36 months? How long was your plan?

2. Was it a 100% payback or just the pot plan?

3. Did the trustee give you a hard time paying off?

4. Did he ask where the money can from that you are using to pay off early?

5. If you don't mind me asking where did the money come from being all your disposal income is supposed to go into the plan?

6. Did your lawyer think it was a good idea for you to pay off early?

7. Did you have any secured bills that you were paying outside the plan but listed on the BK? Were any of them paid off while still in your plan and did you have to turn that money over to the trustee?? Or did you save that money up to pay off early?


I am just so confused because from reading the message boards, I was under the impression that ANYONE can pay off the BK early for just the pot plan if it is past the 36th month mark.

If you try to pay off before the 36th mark then you have to pay 100% of the plan.

I was told by my lawyer that once the plan is confirmed that's it you're done. We talked about possibly paying off early and he said if you do don't try to do it before the 36th month.

While in our BK after 12 months of making trustee payments, we had a few secured bills that were paid off that were being paid outside the plan but was listed on the BK. We asked our lawyer do we have to turn that money over to the trustee and he said no! Take that money and put it into a CD or something. Isn't that still considered as disposal income???

Please can some of you that have been there shed some light upon us?
I am under the old law if this matters any.

Thanks so much

[bkbiker]

Hi,

Good questions, probably plenty of different answers are available,

You filed under the old law which is a little easer

I believe trustees have a lot of latitude as what they will and won’t due, the bankruptcy code can be very subjective

Trustees and their offices are very busy and with thousands of new cases every year they don’t have a lot of time to follow individually cases. Once your case is confirmed; it runs on auto- pilot; something has to happen for them to open your file, do you want to open up that can of worries?

It looks like you have another 2 years left before you reach the 36 month anyway, so plenty of time to think about it.

Most people in this economy are re-financing their house to pay off their chapter 13; usually the trustee will not let you do this if you are behind on your mortgage payments,

Good luck,

Bkbiker

[13inOR]

We paid off early, but were 100% plan anyway, and paid off after 19 months.

We refinanced our house to do this. You are correct, anyone paying less than 100% will have to pay 100% if they try to pay off before 36 months. The trustee did not give us any trouble at all, because we were 100% anyway, but they would definitely want to know where the money was coming from for an early payoff of a plan thats less than 100%.
It generally would never pay for someone to do an early payoff if it means paying off way more than you would have if you just stuck it out for 36 months, in my opinion anyway.

[anonymuse]

There have been some rulings around the country where it is about the amount of money paid, and not the number of months it took to pay it out. I couple have been under 100% plans, but I think they're still fighting those.

This isn't based on legal opinion, just my opinion:

In a Chapter 13, all of your disposable income is supposed to be going to the plan--whether 100% payback or not. If you were under the median income, you were able to get a 36-month plan instead of a 60-month plan. The intent of the law was to have more people in repayment programs than liquidations. Personally, unless someone had some unexpected windfall that somehow the trustee couldn't touch, how could they pay off a plan early unless your total unsecured debts were pretty small to start with? I know the lawyers add for a little padding of expenses to make sure you can successfully complete a plan. I guess someone could cut out the cable, cell phone, and any entertainment expenses to give themselves breathing room, but without refinancing the house, I'm not sure how people are successful with coming up with the money to payoff early.

[anonymuse]

I googled "chapter 13" "early payoffs"

You might want to read these:

http://www.doney.net/faq_changes.htm

http://www.pawb.uscourts.gov/pdfs/Opinions/WWB/05-16-05.wwb.StacyMiller.03-12301.79.pdf

Are you on a 100% plan?

[Pumpkin729]

I googled "chapter 13" "early payoffs"

You might want to read these:

http://www.doney.net/faq_changes.htm

http://www.pawb.uscourts.gov/pdfs/Opinions/WWB/05-16-05.wwb.StacyMiller.03-12301.79.pdf

Are you on a 100% plan?

No... I am not in a 100%....ours is about 73%