top Ad Widget

Collapse

Announcement

Collapse
No announcement yet.

I'm getting out a year early.

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    I'm getting out a year early.

    I am almost 4 years in to a 5 year 35% payback chapter 13 plan. Lately I have being feeling the pinch financially because of the economic slowdown caused by the coronavirus. I was tired of struggling, so I called my attorney and ask for options to get out of chapter 13. My attorney said I really had only two options; get it dismissed and take my chances with the creditors, or do a 100% payback which would be over $60,000. So my attorney went to the trustee and explained my situation. So to make a long story short, the trustee is letting me payoff my case early for just a little over $10,000 with money from my 401k. And thanks to the CARES ACT, I won't have to pay the 10% penalty on my 401k withdrawal either. My attorney said I should have my discharge letter within 30 days of receipt and I'll be free from bankruptcy.

    #2
    Awesome news!
    Latent car nut.

    Comment


      #3
      Welcome to BKForum.
      Wow. That's pretty exciting news.

      Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
      Status: (Auto) Discharged and Closed! 5/10
      Visit My BKForum Blog: justbroke's Blog

      Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

      Comment


        #4
        Wow...that is great!! A very open minded trustee😊
        Filed Chapter 13 - 07/20/12
        Discharged 8/2/16

        Comment


          #5
          Great solution! I'm glad that worked out for you. How much will you save compared with paying the next 12 months? Or is it a wash and you're just taking the hit from your 401K?

          Comment


            #6
            It didn't save much on the remaining year of my plan, but it is saving me $2000 per month now that I'm out. My wife didn't file with me, so she had debt outside the plan I was able to pay, too. I'm debt free except for the mortgage and monthly utilities. Also now that I'm out of chapter13, I can start putting money into my retirement again.

            Comment


              #7
              Congratulations ..,what a wonderful feeling to be done. I was in the same situation as you.,,extremely high payment that I was able to pay off a year early..it’s a major sigh of relief. Enjoy your new financial freedom.
              Filed Chapter 13 - 07/20/12
              Discharged 8/2/16

              Comment


                #8
                Big congrats, Debtkiller!
                You are so lucky that in spite of the sad Covid-related circumstances, you have a compassionate and sympathetic trustee who is allowing you to get out early with out penalty . Now you can truly begin to live again!
                We still have 18 months to go and our trustee is doubling (maybe tripling ) our payment because my husband was laid off last year and fortunately got a much better paying job immediately. Just as our lawyer attempted to fight the first motion for increase, my husband got an unexpected 5% off market analysis pay increase to bring up his salary to what comparable engineers are earning. That $400 is gone and that's OK, but if he raises our payment by the original $600 he demanded as well, I don't think we can pay $1600 a month. That would be almost three times what we were paying (a little under $600) and he would dismiss our case in the blink of an eye -that's the kind of "reasonable" trustee we have! LOL

                Comment


                  #9
                  You'll still have to pay taxes on the 401K withdrawal so you will lose 20-30% of it fyi So it's just like you are borrowing at 20-30% interest. Maybe try for lower trustee payments. Borrowing from you future is not a good idea.

                  Comment

                  bottom Ad Widget

                  Collapse
                  Working...
                  X