Bailing on a Chapter 13 plan

[deanrusk]

What if I am caught up with my mortgage and I say screw you to the trustee and bail?

I know the creditors can sue me but,I travel alot for work and they never could serve me because I live out of a hotel.

Also when does the Statue of Limitations start for debt?

Will it start over after the case is dismissed?

[CindyLou]

I could be wrong, but I don't think they have to "serve" you to get a judgement and garnish your wages. If they know your employer they can notify you somehow. My brother had a judgement by default from discover. They simply mailed a notice to my parent's house which was his last address of record and where he got the rest of his mail. He didn't answer or show up in court so they ruled in favor of the creditor. If he hadn't filed they could have easily garnish and they had never served him with anything.

[HHM]

It is no longer the case that they have to "personally" serve you with the complaint and summons, they only need to make reasonable efforts, i.e. send someone to your last known address a couple times, if you are not there, then they can serve you by publication...and then, bam, hello judgment.

Also, simply being "caught up" on the mortgage might not be enough, when a chapter 13 is dismissed, creditors go back and calculate all interest, late fees, and penalties from the date you filed. If you are not caught up in that regard, you could still be in default.

The statute of limitations would start to run the day your chapter 13 is dismissed. But frankly, the statute of limitations is no way to deal with debt. The fatal assumption about statute of limitations is that you are assuming the creditors are going to abide by the law. In reality, they don't...or more accurately, the debt purchasers down the line do not abide by the law.

[treehugger1]

If the creditors are out-of-state, and depending on your state law, they might have to file a suit or small claim in the district in which you reside. That doesn't stop them from getting a judgment in another state and attempting to file a writ of garnishment and serve the writ on your employer. However, in my state, an employer must be very careful about acting on an out-of-state writ. The employer can be held responsible for any "illegal" action also, and that can include garnishing an employee's wages based on violation of state laws. Not paying your debt can be twisted and complicated unless you stay on top of all the laws of you state, including employment law.

[deanrusk]

I think I will stay in the chapter 13....don't need any more issues.
been in it for 2 years now...Do you think I could pay it off after 3
years into the plan without getting dismissed and having to pay
the full amount back?

[HHM]

The best thing you can do is finish the plan.

I am unsure if you are old or new law BK; but regardless, after 3 years in the plan, I believe you can buy-out the chapter 13 for only the balance of the chapter 13 payment plan (I know that is the case for old law BK, but I am not 100% certain for new law). The ability to buy-out of a new law chapter 13 has not be tested in court yet because no one has been in a new law chapter 13 for 3 years. The issue will be whether a chap. 13 debtor can buy-out a 13 for the remaining balance of the 13, or would the debtor have to buy-out such that unsecured creditors receive 100%.