buy out, refinance

[supernova]

Hello, I am a bit confused, I have read several post about refinancing during 13. I am in the 37 month (5 year) and in the process of refinancing my home.(in Montana). I want to payoff the rest of my bk. the base is 15900 at 100% and i have paid 10,000. does this mean that i only owe 5900 for the payoff if approved. the unsecured is more than that, do i have to pay that off also.

Thanks for the info

[Flamingo]

If your Plan is at 100% as you state you probably can buy out early; however, you need permission to do so and your first step is to contact your attorney and review the situation; your attorney will contact the trustee if he/she feels you can. Did you get permission via the Trustee to refinance your home? I hope so because you need trustee permission in order to do that.

[supernova]

I did speak to my attorney, he told me that as long as im refinancing dollar for dollar for a lower interest rate and to pay my dept that is already included in plan(no new debt) that i just need to e-mail trusty to let him know.. Is this correct?? I pay 11.5 and the new will be 5%. so your saying that anything over the 15900 (base) will be discharged?? also i recieved a total payoff from the bank, does this quote include the rest of my 13 plan payments, or will what i pay the trusty come off the top of what the bank says i owe??

Thanks again

[justbroke]

You will have to pay 100% of the "allowed unsecured claims". What that means, is that all claims filed that were general unsecured claims (credit cards, department store cards, gasoline cards, debts to family/friends, etc), would need to be paid at 100%. That is not necessarily your "plan base". Your plan base is based on your proposed percentage and includes secured debt payments including attorney fees and trustee fees.

To find out what it takes to payoff a plan, you would normally speak to your attorney and the attorney will contact the Trustee's office to figure this out. I would never use the "plan base" as the amount since by definition, it's "only" the base (minimum) amount to be paid IF you stay in the plan over the entire duration (5 years in your case).

[Flamingo]

I did speak to my attorney, he told me that as long as im refinancing dollar for dollar for a lower interest rate and to pay my dept that is already included in plan(no new debt) that i just need to e-mail trusty to let him know.. Is this correct?? I pay 11.5 and the new will be 5%. so your saying that anything over the 15900 (base) will be discharged?? also i recieved a total payoff from the bank, does this quote include the rest of my 13 plan payments, or will what i pay the trusty come off the top of what the bank says i owe??

Thanks again

See what JustBroke states above. Normally, in order to refinance in a Chapter 13, one must receive Trustee permission to do so inasmuch as one's finances and expenses change with a refinance and in order to "buy out" of a five year plan early trustee permission must also be received. The Trustee will be highly interested as to where the money is coming from to do so and will want to review the refinance paperwork. I am a bit confused as to your posting since it appears you are confused as to the advice given to you by your attorney. In order to "buy out" out of a Chapter 13 early you will need to buy out at 100%, not at the lower percentage you state above. Therefore, whatever you have paid into the plan to this point would be subtracted from that 100% figure and you would have to pay the rest. I suggest you sit down with your attorney and go over the entire situation.

[supernova]

I spoke with the trusty assistant today and she told me my payoff would be approx 6000 (she also concurred with another assistant). She also told me that my attorney would have to file with the court first before the trusty would reply (file what ?). My attorney and the trusty assistant are telling me two different things. I also got a payoff of my current morgage and it includes my bk arearage. so if thats paid what does that do to my plan amount. Should i write a letter and send it to both (trusty and lawyer). I have read that if your over three years into the plan with good standing the trusty will approve the payoff using the base amount.(base plan) I'm sorry for all the questions, just trying to do things the right way.

Thanks again

[justbroke]

In any event, you will need to petition the court for permission to pay the plan off early and gain Trustee approval, usually by stipulation. You may find that your plan base is not enough, but that's what the whole process is about.

I also don't believe everything the Trustee's assistant tells me because they have told me things that were not the law and I've had to correct them in front of a creditor attorney.

What did your attorney say? Is his amount higher and he's telling you 100% and you just don't like his number? In either case, the court must approve and this would be the FIRST case I've read since 2005 that someone bought out for less than 100% of the "allowed unsecured claims".

[Flamingo]

Prior to October 2005, if one was in a five year Chapter 13 and past 36 months of paying all plan payments on time, they could, if they were able, look into paying off their plan at their confirmed percentage. We did via refinancing 4 years into our Plan (our confirmed plan was at 54% and we ended up paying 64% due to an inheritance). That is not an option now as one would have to buy out at 100% of their plan due to the new BK law which took effect on October 2005. If your plan initially was 100% all your attorney has to do is file a Motion to petition the court to allow you to buy out. You just can't walk in there and hand them a check for what you think is the balance of your Plan. Doesn't work that way. Also, you are represented by an attorney in your filing and anything must go through the attorney - the trustee will not work directly with you since you are represented by counsel. I suggest you call and make an appointment with your attorney and sit down and go over your entire situation to avoid further confusion. Best of luck to you.

[momofthree]

I believe Des once mentioned (Des will correct me if I'm wrong, ) that if you were under the median when you filed, then you can payoff at the base amount after 36 months; basically just amending the plan to change the term, thereby creating a balloon payment. This only applies to under median filers at the time of filing though.

Good luck, OP, and keep us posted!

[Flamingo]

I believe Des once mentioned (Des will correct me if I'm wrong, ) that if you were under the median when you filed, then you can payoff at the base amount after 36 months; basically just amending the plan to change the term, thereby creating a balloon payment. This only applies to under median filers at the time of filing though.

Good luck, OP, and keep us posted!

It has been over five years since the new Bk law went into effect in 10/05. Since that date, numerous folks have filed for Chapter 13 and as justbroke states above, there are zilch postings in this forum about anyone buying out at less than 100% in a Chapter 13 plan. With all the members this forum has and all the questions and postings about buying out early over the past several years, there should be hundreds of postings by now about folks buying out at their confirmed plan percentage by this time.

[supernova]

This is why i was asking, i have read postings of this on the net, but none recent. if anyone finds a recent post, please post here. I do have a meeting with my attorney, so i will post what he says..

[supernova]

UPDATE: i sent a email to the trusty as follows... I am writing to you in request for a total amount to payoff my chapter 13 plan. I am considering a refinance of my mortgage for a lower rate. And would like to payoff my plan as well. Please inform me if this is possible and the amount needed to do so.

His reply: You need to visit with your attorney about this. The early payoff is not contemplated by your plan and must be approved by eh Court.

I show your payoff to be xxxx—once again—subject to the approval of the court.

So, my attorn. petitioned the court for a early payoff, amount to be determined by the trusty. I'm waiting approval. My question is, can the court and or trusty change the amount of the payoff that the trusty already gave me?

[justbroke]

Yes. The court is the arbitrator and could decide that you need to pay 100% of the allowed unsecured claims. This is why it has to go before the Judge. If the Judge is basing the decision on post-BAPCPA (October 2005) confirmed plans, this amount should be 100% of the allowed unsecured claims, any unpaid attorney fees, as well as the Trustee commission.

Also, you should never ever circumvent your attorney by communicating directly with the Trustee.

[jcj112562]

Not that he needs a second, but I will toss a smidgeon more weight behind jb and the rest of those who are in the "Early Payoff = 100% of allowed claims + attorney fees unpaid + trustee percentage". One need not ask the trustee for the number, it is easily calculated from the information on 13datacenter. I would assume most folks can either add or have access to a calculator. Since 2005, if you want out of a Ch13 early, you get to pay everyone what you owe them, not the percentage calculated when you had the plan approved.

John

[supernova]

ok, i received a order granting permission to pay off plan early, amount to be determined by the trusty. Now my morgage company says they received relief from the automatic stay and want to start foreclosure. does this give them relief???