chapter 13 old plan

[Peevee]

I am now at 36 months in a chapter 13 at a payback of 51%. I am going to try and buy out or was till I read some posts about the percentage being increased. I thought at 36 months you could buy out at the pot plan. I am kinda nervous about even bringing it up if theres a chance that my plan will be increased.

[Flamingo]

I am now at 36 months in a chapter 13 at a payback of 51%. I am going to try and buy out or was till I read some posts about the percentage being increased. I thought at 36 months you could buy out at the pot plan. I am kinda nervous about even bringing it up if theres a chance that my plan will be increased.

Hopefully the following information can help you as we were Old Law and bought out 4 years into our 5 year plan:

You will need to discuss buying out with your attorney to determine that you will be able to do so (i.e., have enough equity in your home). If it is determined you can buy out, the attorney will contact the Trustee who will review your financial situation. If it is determined all is OK, the Trustee and attorney both will file a Motion to request the Court for permission for you to buy out of your Plan early. There will be a cost for this - we paid $400 to our attorney for extra attorney's fees. We refinanced when we bought out so the payment was included on our settlement sheet and paid to the attorney after settlement. I am assuming this is what you may do (refinance to buy out).

You may need to have a home appraisal done (at your expense) to ensure you have enough equity in your home for buyout as the Trustee will want that proof. The entire process takes time. Once you get approval from the Attorney/Trustee to start the process, you will need to contact a broker to qualify for a mortgage (might be tough in today's bad mortgage market). To give you a window as to time, it took us 7 months from first contacting our attorney until final settlement for us to buy out.

Your first step is to see if you can actually buy out. You will have to continue to make your Plan payments during this process and your Trustee will provide you and your attorney with the final Chapter 13 balance of your Plan as of the day of buy out. You will buy out of your Plan at the amount that is due at that time. There should not be any increases in percentages.

Note - being late with any of your Plan payments during your Plan can work against you as to finding a lender to refinance. This is a horrid time to look for a mortgage as lenders are extremely picky now due to the subprime and credit mess out there. You need to find a good broker (your attorney should be a good source for a reference) and FHA is probably the way to go although you will have additional PMI added to your payments for 5 years.