Chapter 13 - Early Payoff

[twilly722]

I live in PA. I have completed 48 months of a 60 month plan. Is it possible to pay the plan off early and be done with this? Has anyone done this successfully? Since it's been so long, am I in the clear with the unsecrued debts?

I would love to get my house refinanced at a lower rate as we are over 8%. I would appreciate any advice and guidance.
Thank you.

[lrprn]

I live in PA. I have completed 48 months of a 60 month plan. Is it possible to pay the plan off early and be done with this? Has anyone done this successfully?

The current bk law makes no mention of early payoff for Ch 13s. Most bk districts have decided that in order to pay off early, you have to pay back 100% to your unsecured creditors that filed claims.

Unless you are in a 100% plan now, can you afford to pay back 100% of your unsecured debts that to those creditors that filed claims to be paid by your plan?

Since it's been so long, am I in the clear with the unsecrued debts?

No. Your case isn't finished until your plan payments end. Unsecured creditors are the last to be paid by your plan so will receive payments from your plan until the last payment.

I would love to get my house refinanced at a lower rate as we are over 8%. I would appreciate any advice and guidance.

The chances of getting refinancing while in an active 13 is about zero.

Talk with your lawyer to discuss the possibilties of an early payout. Keep in mind that even if you are able to pay out of your 13 early, with a newly discharged Ch 13 on your record your chances of refinancing right away in this dim economic climate are small.

[HHM]

Finish the plan. lrprn is correct, early buyouts are not based on the amount left to be paid, but on the TOTAL amount of claims.

An active chapter 13 does not disqualify you from refi'ng your home, but the odds are slim. FHA allows refi within a chapter 13 after 1 year of consistant payments in the chapter 13. Your ability to refi will depend on the loan to value on your home, and your income.

[krielly]

If the OP is 48 mos into their plan, then they filed "old law".....

Twilly, consult your attorney. You may be able to pay off your plan early at the percentage of the plan, not 100%.

We filed old law as well. We were able to start sending a bit extra each month starting a few months ago, and I now have 11 payments left. I s/b done paying at the end of June 2010, instead of October.

Good luck!

[lrprn]

If the OP is 48 mos into their plan, then they filed "old law".....

Good catch, kreilly! 48 months back from this month puts this filing in August or September 2005, right before October 2005 when the current bk law went into effect

TWilly, if you did indeed file your 13 before October 17, 2005, then your case is under the former bk law that allowed early payouts at the plan percentage owed after three years. It does not require paying 100% of unsecured debt. If this is the case, lucky you! Hope this works out in your favor.

[Flamingo]

We filed old law and bought out early...If you filed prior to 10/15/05, your first step is to contact your attorney to see if you are able to financially buy out and, if so, the steps involved. We bought out for good reason though and that was because we needed funds for a new roof and some other major house repairs that just would not make it to the 60 month mark. We refinanced. Again, your first step is your attorney who will advise you what needs to be done in your situation. Your attorney can probably recommend a good broker for you as ours did with us and through that route we avoided the predatory lending monsters that were eager to help us at that time. It was our broker who kept us away from those offers and got us a rate of 6.5% fixed rate which was the going rate at that time (early 2006). We only refinanced the house repairs and the payoff and had to submit all that paperwork and costs to the trustee and how it would all be paid off. The attorney and the trustee filed a Motion for us to be able to buy out (extra $400 cost) and in the period of less than six months from start to finish, we were at the settlement table signing papers. It is not an overnight process so be prepared for that. You will also be able to buy out at the confirmed percentage of your Chapter 13 Plan and not at 100%.

If you filed after 10/15/05, you will not be able to buy out at your confirmed percentage. Your attorney will advise you accordingly.