Voluntary dismissal of Chap 13

[esmith1515]

I have been in Chap 13 for almost 2 years of a 5-year plan. I had two cars as part of the plan and both are now paid. I had some taxes that are now paid. The rest of the plan is credit cards and student loans. I am considering voluntarily dismissing my case because my wife recently got a new job with a considerable raise. My lawyer told me that they will not be checking our income as long as we continue to make our plan payments. I feel we have gotten over the worst of our finanacial difficulties and are ready to get out of our plan and buy a house since we have never owned a home. I guess I have questions as to what I could expect 1-3 months after dismissing my case. Would I owe more on my cars than what I paid? Would the student loans companies work with me in setting up monthly payments? I guess I am looking for some advice from someone that may have been in a similar situation.

[StaciMM]

I haven't been there, but I think the main issue would be your credit cards and any other unsecured debt. They could go back and assess the max interest rate for the past 2 years.

If you have the titles on the cars, I don't see how you could lose those.

For the student loans, it will depend on who your lenders are. Most likely-you can work something out.

[esmith1515]

Both of the finance companies still have the pink slips on my cars. They have said they will not release them until they have discharge or dismissal papers. I know I can work out payments on the student loans. I didn't really have that much credit card debt, only about 8K. I guess I'm trying to figure out if getting out ASAP and re-establishing credit on my own is worth the risk of losing the security of staying in the plan for 3 more years.

[Minnymouth]

IF YOU VOLUNTARILY DISMISS,
You could end up paying everything in FULL!!

And its possible the US Trustee won't let you unless everything is paid in full, too.......

So caution, ask your attorney about the pros and cons, if not call another attorney if you were pro se and see what he says.....

You under old laws or new ones??

Minny

[esmith1515]

My case was filed in March 04, so I'm assuming I'm under the old laws. I'm aware that the student loans companies would add on interest from the last 2years as would the credit card companies. I know with the added income we have we could pay off the credit cards within a few months. If the student loans companies would settle on a monthly payment over a few years, then I feel like we may be better off in terms of our overall financial future to get out of the plan. I'm not sure if either car finance companiy is going to say we owe them a big lump sum before we can get our pink slips

[Senior Citizen]

My understanding is that if yiou pull out before 3 years you would have to pay every one in full . I would wait after 3 years and then talk to your lawyer. You have only 1 year to go.

[Minnymouth]

Looking at your options and the consequences - I would just stay in my Chapter 13 and tough it out....... You might save a LOT in the long run.....

Put it on paper - payments out now and then payments out if you go out of the 13 program..... do a comparison..... could put you in a big financial strain if all payments go HIGHER than now.....

Changing could UNDO all the Good that filing bankruptcy did for you.....

Check it out, make your decision wisely

[esmith1515]

Thank you all for taking the time to respond and give the good advice that you all gave. By the summer we will be half way done with the plan. The best thing to do is probably stay with it and in 2 and a half years will have more income and no debt. From the other things I read in this forum, I will be able to re-establish credit and get into a house fairly soon after if I am careful and smart.