Chapter 13 early pay off

[anonymuse]

I am 100% - so they want me for EVERYTHING

Yes, but whether you pay it off early or not, they can't get more than 100% out of you!

[aa06a47]

Everything you hear is so different??!!??!?!?!?! man.....

my lawyer was pretty adamant about the 36 month rule. Unless you are in a 100% payback

for example I am paying back 40% or lets say $40,000 of a $100,000

If I came back in 6 months and said I had $38,000 or whatever to pay it off, they would say, okay lets have that $38,000 and keep paying.

like I said, it looks like there are no clear cut answers

Yes, your exactly right in your example. The ruling from the judge in MO, unless appealed, pretty much as I see it makes a 60 month plan the same way. If you in a 60 month plan, low % payback, it would be best to stay in there the entire time.

Of course, there is also the time value of money that creditors may like. For example, your in it for 3 years, and you can come up with a loan or whatever to pay the next 24 payments off in one lump sum. Is it in the best interest of the creditors to get the money in one lump sum, or spread out over the 2 years? Who knows right now. You hear so many things, who knows until you actually petition the court for an early pay off.

[AnnieG]

what if a creditor didn't submit a claim?

Does anyone know what might happen if a creditor had not submitted a claim, and we decided to pull out of CH13 and try to negotiate with creditors on our own -- would these creditors that didn't submit a claim come after us for $$$'s? Even if they show the debt as "charged off"?
And what about if a car payment has been crammed down -- would the auto company bring the total back to the original amount owed before the cram down?
And what about the $$'s already paid in?
Not really considering doing this, but was wondering what the outcome might be....

[anonymuse]

Of course, not gospel, but here's one lawyers FAQ about early payoffs:

Can I pay off my Chapter 13 plan early?

You can pay ahead a few months on your plan without any problems. Whether you can pay the entire balance of you plan off depends on how many months you are into your plan, and how much of the debt your plan actually pays:

1. You can if your plan pays off 100% of all of your bills. If your plan pays all of the creditors 100% of the debt, you can pay off your plan at any time. Most Chapter 13 plans significantly reduce the amount of money you have to pay back to creditors in order to discharge all of your debts.

2. You may not be able to if you have completed less than 36 months of your plan.You probably can if you have completed 36 months of your plan. If you are in the 36th or later month of your plan, the Chapter 13 trustees will usually accept payment of the balance of the plan payments at any time.

http://www.doney.net/faq_changes.htm

[anonymuse]

Read this decision:

http://www.pawb.uscourts.gov/pdfs/Opinions/WWB/05-16-05.wwb.StacyMiller.03-12301.79.pdf

Basically, it's saying that early payoff is not a modification of the plan since it is not the number of payments that is important. Instead, it's that the total amount paid is fulfilled. And they go on to say that the creditor actually gets more value for the money receiving it up front than having to wait to receive it over a 60 month period. As long as your financial situation has not changed (i.e. no increase in disposable income), then the date of early payoff does not appear to matter.

[aa06a47]

Read this decision:

http://www.pawb.uscourts.gov/pdfs/Opinions/WWB/05-16-05.wwb.StacyMiller.03-12301.79.pdf

Basically, it's saying that early payoff is not a modification of the plan since it is not the number of payments that is important. Instead, it's that the total amount paid is fulfilled. And they go on to say that the creditor actually gets more value for the money receiving it up front than having to wait to receive it over a 60 month period. As long as your financial situation has not changed (i.e. no increase in disposable income), then the date of early payoff does not appear to matter.

This decision contradicts, seems to me anyway, the decision in Missouri. The judge in PA seems to think more like me in this matter than the one in MO does.

[anonymuse]

This decision contradicts, seems to me anyway, the decision in Missouri. The judge in PA seems to think more like me in this matter than the one in MO does.

So much for fair and CONSISTENT application of the law.

We're not going to arrive at a single answer here anyway, especially since none of us are lawyers. However, this is one great discussion! BKFORUM.COM ROCKS!!!

[aa06a47]

So much for fair and CONSISTENT application of the law.

We're not going to arrive at a single answer here anyway, especially since none of us are lawyers. However, this is one great discussion! BKFORUM.COM ROCKS!!!

Yes it does rock. I sent the link for the MO ruling to my attorney and asked her if it changes her advice she had given me concerning paying it off after 36 months. She said I could still pay it off in month 37 the remaining pot balance.

She also thought I was weird for reading rulings. LOL!!! I told her what was weirder was the fact that no two judges seem to agree on the subject. She said right now, there is alot of that going on and they figure it will be a year before it gets fixed