Is there such a thing as reduction of your BK payment?

[Lesa13]

Let's say you have a debt load that is decreased due to some miracle - let's say your grandparents pay off a $10,000 bill that was part of your chapter 13 and payment. Will the court reduce your payment then or just pay the remaining creditors in the plan a higher percentage?

[Rob-NC]

From what I understood (and the people here will correct me Im sure ) but you cannot pay off a bill directly thats includded in the actuall plan. All payments to creditors that are in the plan must go through the trustee (unless you have told the trustee that that particular creditor is to be payed outside the plan, like a car, house etc). And you cannot dictate to the trustee which creditor is to receive what percentage of the payment.

Trying to payoff a creditor that was includded in the plan without the trustee;s approval etc..etc..etc.. you risk a dismisal of your BK

Please forum guru's correct me on this one, this is/was my understanding when I went through the initial 341 meeting 5 years ago (old plan)

[lrprn]

Let's say you have a debt load that is decreased due to some miracle - let's say your grandparents pay off a $10,000 bill that was part of your chapter 13 and payment. Will the court reduce your payment then or just pay the remaining creditors in the plan a higher percentage?

Could be either - it depends on your trustee and local customs. Another third option you didn't mention is for your Ch 13 payments to remain the same but the trustee reduces the total number of payments accordingly.

Unfortunately, recently the trend seems to be moving to returning your entire windfall to the creditors for a higher % return and keeping your payment amount and number of payments unchanged. Just in case this isn't such a hypothetical situation for you, be sure to discuss with your bk lawyer before the grandparents make their generous gesture only to see it go straight to your creditors.

[anonymuse]

If you are on a 100% plan and you had a windfall, then you could see a reduction in payment. Otherwise, it's the luck of the trustee.

[SinkingFast]

Yep. The money has to go thru the Trustee. The Trustee's gotta get their cut dontchya know??!!

And the Trustee decides how the money will be divied up as well. What Creditor gets how many $$$'s.

Unless you're in a 100% payback plan to start, your payments will continue on as usual to the end. Or until you reach 100% payback.

[aa06a47]

Let's say you have a debt load that is decreased due to some miracle - let's say your grandparents pay off a $10,000 bill that was part of your chapter 13 and payment. Will the court reduce your payment then or just pay the remaining creditors in the plan a higher percentage?

Instead of your grandparents paying off a 10K bill for you, have them set aside the money in an account with there name on it until you get done with the chapter 13. They may even be able to give you check writing capabilities as long as they don't use your ss #. Then, after your 13 is closed, if you really desire to pay a specific creditor more than they are received in the 13, there is nothing saying you cannot do that. Personally, I don't have any creditors that I would desire to pay after I get done with my 13.

I believe the language is pretty plain on windfalls, trustee gets them and dispurses them out. The windfall will increase the % payback to the unsecured creditors.

[aa06a47]

If you are on a 100% plan and you had a windfall, then you could see a reduction in payment. Otherwise, it's the luck of the trustee.

You won't likely see a reduction in payment, just a reduction in the term.