What is buy out mean?

[DUMBAGAIN]

I see some posts about buying out their plan, what does that mean?

[woeisme]

Under old BK law, after 3 years one could pay off the remaining balance of their base plan. So if the total debt they put in the plan was say 100K, but their base plan (amount they proposed to pay back) was 50K, at the three year point if they had paid 30K into the plan they could "buy out" their plan for the remaining 20K.

New law is different in a lot of ways, and right now there's no way of knowing if someone who filed under the Oct 2005 changed law can "buy out" their plans for the base plan price or not because no one has been in a CH 13 new law for 3 years yet. There is speculation that some trustees might want to make that same person pay at 100% of their debts (the 100K in my example) to buy out, vs. just the base plan price of 50K. Hopefully it will be the same as with old law, but until those first test cases go through, it's hard to know. If you try to buy out before the 3 years, it's my understanding that you've always had to do 100% payback, but I could be wrong on that.

[hey72]

I recently asked my attorney about this. I understood how the old law worked, so I was curious.

His answer was that there is no early buy-out unless you pay 100%. Whether that is true or not, I guess, remains to be seen, but I thought I would pass his answer along.

[Flowers]

glad you asked this, I was wondering myself...interesting

[lrprn]

Every court district will likely make their own decisions about Ch 13 early buy-out and what's allowed. Get ready for more differences depending on where you live until case law settles things out. That could take years.