Chapter 13 early buy out....

[fiats3]

So what's the real deal on early buy outs of Chapter 13? I've read you might as well forget about doing it unless you are at least 3 years into your Chap13 plan. I've also talked to one attorney who said you can do it earlier than that, if you make sure you pay the trustee his fee that was due over the life of the whole plan. My total plan amount is a paltry $7,500 over 60 mos (that's what I'm going to propose, $123/mo) consisting of exlusively priority tax debts. I have about $100K of unsecured debts that I would discharge at the end of the plan, but I am paying none of that while I'm in the plan. I heard that if you want and early payoff/buyout that you will have to pay most or all the unsecured amount as well...which is it? Has anyone on the board done this? I want to sell my house, payoff the mortgage, and use the excess money coming to me (essentially my equity), to pay off my 13. But I don't want to give the trustee all of the equity money....how can I do this with the least amount of complications/pain?...

[hhou812hh]

The only ways I know of that you can get out before the end of the plan is
a-pay off 100% of your debts that are in the plan.

b-if you have problems such as illness,injury,unemployment since these misfortunes are beyond your control then you may qualify for a hardship discharge as long as you paid equal to your non-exempt assets.

Other then that you will be in it for the long haul.

[HHM]

Basically, if you want to get out of a chapter 13 plan in less than 36 months, you must pay 100% to yoru unsecured creditors.

If you can pay off your unsecured creditors at about that amount with the sale of your house, why bother filing chapter 13 in hte first place.

[StaciMM]

He wants to pay his priority tax debts ($7500) and not pay anything on his unsecured debt ($100k).

Not too realistic... I'm curious to hear how this one ends! (Same poster wanted to know what to do about the lease on his jag ending soon...)

[QuietOne]

GOod luck on that!

We sold the house at a huge profit....but we only got to keep 10,000 of it and not, it doesn't pay off the plan. You just end up opaying more into the plan. OUr profits would have twice paid the whole amount of the plan, but instead, it was added to the plan as income, and we still have to pay the original amount over three years.

You have to remember that part of all of this is not just getting you out of debt...it's also proving to a potential new creditor that you are a worthy credit risk.

[leverage]

I've heard that some trustees will allow you to pay off a 13 early if the funds are from a gift that would only be given to you for that purpose.

[newbie2]

I've heard that some trustees will allow you to pay off a 13 early if the funds are from a gift that would only be given to you for that purpose.

Sure they will, if the payoff is 100%.