I'm going to buy out my BK...I still

[fiats3]

don't get the logic though....My 5 year BK13 plan pays 51% (~$50K) of my total creditors. I thought that was pretty high. (Oh well, that's what happens when you go pro se!). But, here's the part I really don't get. If I 'give' the trustee $50K now, why would she impose the general rule that if I do a BK buy-out before 36mos., I would have to pay 100% of my total debt? I mean, if I do the full 5 year plan, she 'only' gets $50K. And, if I buy-out the BK13 now, she still only gets $50K...no diff as far I'm concerned. Why discourage me NOT to pay off a 5 year plan that I have statistically speaking, only a 75%chance of completing?

In other words, wouldn't you take the $50K lump sum, if your were the trustee? What am I missing here? I mean, if she says, I'm going to have to pay $100K to get out of it now, of course I'm not going to go for it. She incurs more risk than me, since she has no idea if I'm going to complete the 5 year plan or something like my 2 year ARM kicks in and I ask for a change in my plan such as a reduction (I know, it never happens, but hey, something has to give if your mortgage goes up $300/mo., like mine just did).

[SinkingFast]

If you buy out before the 36 month mark, you would have to pay back 100%, or ~$100K.

If you wait, you "only" pay $50K total.

That's why the Trustee is telling you to wait. She's trying to save you $50K from your wallet.

Since you filed Pro Se, the Trustee is obligated to advise you what you should and should not do. The Court wants to be sure you know your rights and you make an informed decision.

[newday]

If you're bankrupt where would you come up with the $50k to pay it off now?

[bkbiker]

Hi,

I am sorry to hear about your increased mortgage payments, sometimes bankruptcy just sucks!

Chapter 13 trustee’s are on an annually salary (About $170,000) so there is no incentive for them to let you get discharged early.

More important is the court order directing you to pay into your plan all disposable income for the duration of your plan. The trustee and your creditors are looking forward in hopes that you receive a substantial pay raise or other financial win fall, than they will get paid more. If you op out for a dismissal, than all the debt comes back with interest and you are back to square one.

It looks like you filed under the old law, so if you can tough it out some how until the 36 months is here, than a refinance and pay off of your plan is possible. Under the new law it is starting to look like this is no longer an option and they want you for 5 years.

Good luck,
bkbiker

[SinkingFast]

Hi,

More important is the court order directing you to pay into your plan all disposable income for the duration of your plan. The trustee and your creditors are looking forward in hopes that you receive a substantial pay raise or other financial win fall, than they will get paid more. If you op out for a dismissal, than all the debt comes back with interest and you are back to square one.

Good luck,
bkbiker

BKBiker made a very good point there as well.

The longer the Trustee can keep you in the plan, the more likely you'll have a salary increase, an inheritance, win the lottery, whatever windfall may come your way. That's more money for the Trustee AND the Creditors.

[fiats3]

Don't buy your logic gang...

The longer the plan (5 years in my case), statistically speaking, the LESS likely it is that I make the payments, dut to unforseen layoff, death, disability, etc. The odds say you always are better off taking a lump sum than taking incremental payments over time. This is why most lottery winners take the lump sum, instead of the annual payments. I heard 75% of all chapter 13 NEVER go thru to completion.

Nope, not buying your explanations, however well intended. And yes, the trustee DOES take a cut of the action, typically 10% of the payments (or in this case the lump sum), and that is where they make their REAL money.

Gonna file my motion to incur refi and see what happens. Worst case is they say no. if they do, then I will file a motion to change plan (reduce) due to ARM increase.

[bkbiker]