Chapter 13 early pay off

[aa06a47]

While I'm a long way from even thinking about this one, I see alot of post by people wanting to mortgage there home to pay off the chapter 13 early.

Does it make much since to actually pay off a chapter 13 early? I am trying to think in my brain how it would benifit a person to do so? In the plan, the payments won't really change that much, if any, your not paying any interest (you might be, but it is already included in the payments). If you borrow money to pay it off, aren't you really actually increasing your payments, or getting yourself into a 15 year mortgage or 30 year mortgage.

It seems to me that it will cost you more in actual dollars to pay off early. Unless you can get the trustee to take 1/2 which we know that ain't going to happen.

[time4cake]

I agree with you regarding financing the Chapter 13 plan. However, maybe the psychological element is what forces people down this path.

The idea of having to get all of life's decisions ok'ed by a surrogate mommy or daddy may be just to much for people to handle, and I don't blame them.

I have recently filed chapter 7, and believe I would rather lose a finger than be involved in a Chapter 13 payment.

[SinkingFast]

Not to mention that while you're in a 13 plan, even if you get Court approval, you have a hard time buying a car.

But buying out or paying off early is really only an option if you're in a 100% pay back plan anyway. Isn't it?? And that's after a certain period of time paying into the plan??!!

[13inOR]

In many cases it just doesnt pay,but in others it makes a lot of sense.
Look at us for example, paying off 100% anyway, paying off early saved us $1000 month. Plus enabled us to get the car we needed desperately.

And, psychologically speaking, it feels great to be out from under the trustees thumb. : )

[aa06a47]

Yeah, if your paying 100% off, it is probably a good thing, I'm paying 10%, so don't think I want to "rock" the boat once things get going.

[13inOR]

no, definitely not!!! 10% is a GOOD thing!

[Minnymouth]

aa06a47,
Rock the boat, you'll be paying 100% instead of 10% - COUNT your blessing and pay de man.....

Minny

[aa06a47]

aa06a47,
Rock the boat, you'll be paying 100% instead of 10% - COUNT your blessing and pay de man.....

Minny

Yeah, I rock the boat, I'll be dog paddeling in the ocean in a sea of sharks.

[Ch13experts]

Can I make a suggestion? I know I keep saying this in almost every post, but it seems like a good place to mention it again. Your trustee is not the Devil. You have every right to call and ask them if they will allow you to pay off your 13 early, and while you have them on the phone, ask them what their rules are for doing it. One of the trustees here in my area will allow people to pay off their 13 at any time, and do so at the pot plan...i.e., at the agreed to reduced amount.
The lenders who will do a loan at that time might have some terms that may include higher rates or points, but you could also use the buyout of your 13 to start to repair your credit. Once you improve your credit score, you will be eligible for much less expensive financing. Rates will not stay low forever and we have already seen about a 1% increase in mortgage rates from thier record lows. Now is the time to look into this. Just ask 13inOR.

Best wishes,

[PI_Lvr]

I'm in the process of selling my house to pay mine 100%. I have two secured (about 30% of my total) that I'm currently paying 100% and then it would go to paying a total of 3% to my unsecured. The reason I'm paying early is 1) getting divorced and don't want to be connected to her for anything (she pays me each month to cover a portion of the payment); 2) I never wanted to stay in this area so I'm selling and leaving the state; and 3) like was mentioned; the emotional relief of again being able to spend your own money the way you want to and not having to ask permission.

I have looked at the pros and cons of staying another 34 months or getting out when I can and this is the only way that I feel I can move on with MY OWN life.

Good luck to all in all your decisions...
PI_Lvr
Virginia

[aa06a47]

Thanks PI Lvr., so the trustee accepts the 3% for the unsecured? I have heard 2 sides, if you pay early, you pay it all, and then my lawyer said, once the POT is set, that is all you have to pay. You have some good reasons to "move on". Good post.

[QuietOne]

Ch13experts....

that's part of what is wrong with this whole system....trustees doing whatever they want.

We sold our house after our plan was in place...had to for my husbands' job.

we were originally supposed to pay at 32%...which meant the profit from the house would have paid off our plan...

No, it didn't...they just took that $$...added it to the 32%, which means now we'll be paying it off at 80%...if not 100% by the time we're done.

We tried to talk to our attorney several times to find out the ins and outs of this before we made our decision...had we known, my husband would have taken the offer in our old town (for less money) and we'd have kept on where we were.

Now, we own no home, we're paying at a much higher rate and yet our expenses are more each month...not less.

But again, it should not be different trustee to trustee.

[aa06a47]

Ch13experts....

that's part of what is wrong with this whole system....trustees doing whatever they want.

We sold our house after our plan was in place...had to for my husbands' job.

we were originally supposed to pay at 32%...which meant the profit from the house would have paid off our plan...

No, it didn't...they just took that $$...added it to the 32%, which means now we'll be paying it off at 80%...if not 100% by the time we're done.

We tried to talk to our attorney several times to find out the ins and outs of this before we made our decision...had we known, my husband would have taken the offer in our old town (for less money) and we'd have kept on where we were.

Now, we own no home, we're paying at a much higher rate and yet our expenses are more each month...not less.

But again, it should not be different trustee to trustee.

I'm so sorry about this quiet1, sounds like you got scammed by the trustee and your lawyer. I figure once my payment gets set, I'll just try and stick it out the 5 years, and pray nothing happens. I do see the desire to get out of the plan early, but not at the cost of losing everything to do so.

[nervousSC]

This is the weirdest thing, I was just told by my attorney last week that if you come into money or have the opportunity to pay it off, I can, at the 2% of my total debt.....I thought he was just wrong, but now I'm wondering. Could it be different states have different laws regarding this???

[aa06a47]

This is the weirdest thing, I was just told by my attorney last week that if you come into money or have the opportunity to pay it off, I can, at the 2% of my total debt.....I thought he was just wrong, but now I'm wondering. Could it be different states have different laws regarding this???

My attorney told me the same thing as quiet1's attorney. Look what happened to quiet1. I don't think I will trust anything my attorney says when it comes to the early pay back option. I am sure if your 100% payback, there is no problem paying back early. It is those of us with low % paybacks that have to be really careful.