Ch 13 "New Plan" early payoff

[morpheus]

I am in ch 13 "new" plan. Everything is going ok, my payments leave me enough to do ok, so I could go the entire 5 years. However, when I look at the amount I am paying back, my payments will take care of the plan total in about 4 years. Maybe there is some "slack" built to account for modifications? don't know... Or, will I have to pay for 5 years anyway? I am currently paying back 35% of the total I filed on, all unsecured credit. I'm not going to rock the boat but just wondered if through the normal course of my payments, I finish a little early, will the CH 13 will be successfully finished, released or whatever you call it. When I pass the 36 month mark, if I had pay-off for the rest of the plan could I do that or would I need 100% of the original debt at that point?

Thanks for any help...

[dyrstr8s]

I'm certainly no expert but everything I have read indicates that the only way to end a new plan bk in less than 5 years is if you pay 100%.
When you say that your payments will pay the plan total in 4 years, is that your plan base, 35% of unsecured? Remember that you have trustee fees and maybe some of your attorney's fees included in the plan on top of that. Plus, if the trustee is getting income tax refunds, that just goes on top of the base, increasing your percentage of payback.
I think for us, more recent filers, who are paying back less than 100%, our best bet is to lay low, make the payments on time, and ride it out for the full 5 years.

[95kindebt]

today our attorney said that in the 37th month, you can do a re-evaluation, and perhaps "cut a deal" for an early payoff. If you do it BEFORE the 36th month, or in the 36th month, then you have to pay 100% back of the claims filed in your case. good luck!

[lrprn]

However, when I look at the amount I am paying back, my payments will take care of the plan total in about 4 years. Maybe there is some "slack" built to account for modifications? don't know... Or, will I have to pay for 5 years anyway? I am currently paying back 35% of the total I filed on, all unsecured credit.

I hate to tell you this, but you can't accurately figure the length of your plan by looking at whatever amount you see remaining to pay on your trustee's website. Most trustees start the accounting by first listing just the secured and priority debt total owed, and then when that is paid off, the amount jumps to show the total of what's owed to non-secured creditors. Keep in mind that your plan accounting is set up for your trustee's benefit, not for yours.

The Ch 13 plan is structured to send back all your disposable income to the trustee to disburse to your lawyer, to the trustee for administrative costs, and to your secured and non-secured creditors (1) for the number of months specified; or (2) until your non-secured creditors are paid in full (100%, not 35%) whichever comes first.

When I pass the 36 month mark, if I had pay-off for the rest of the plan could I do that or would I need 100% of the original debt at that point?Thanks for any help...

Currently the few Ch 13 case law decisions state that the only way to pay out of a less-than-100%-payback Ch 13 early, no matter when the request is made, is to pay back 100% to your unsecured creditors that filed claims. There may be exceptions by local court decisions or custom - your lawyer will know best about this. But be prepared that an early payout request without paying all unsecureds that filed claims 100% is likely to be challenged by your trustee.

[morpheus]

Thank you!

Thanks for all of the great information. I had suspected that this was the case and can easily survive for 5 years instead of 4. I do know that that legal and trustee fees must be included and do see them in my payments. The bottom line for all of us lucky "new" cases is that many of these issues must be tested in court. I'm sure my lawyer will keep me out of trouble but even they don't know how all of these issues will work out until more decisions are reached.

Once again, thanks everyone. Good luck on all of your plans!