How to payoff a new ch. 13?

[cnet2k]

Hi,

My wife just recently got approved for her ch. 13 bk. She's made about 3-4 payments thus far. The problem we have is we are now trying to buy a house and was told by her lawyer that it would not be advised and that we would need approval from the Trustee. Is that correct even though I was never part of the BK? If so we even thought about borrowing money from relatives to pay off the BK completely, but I was told we would have to wait at least 3 yrs into the BK. It's like a catch 22. We have a 6mth old son and we are just trying to start a modest life. I'm now contemplating voluntarily dismissing the BK and try settling w/ the creditors myself. Any thoughts/advice?

[aa06a47]

Hi,

My wife just recently got approved for her ch. 13 bk. She's made about 3-4 payments thus far. The problem we have is we are now trying to buy a house and was told by her lawyer that it would not be advised and that we would need approval from the Trustee. Is that correct even though I was never part of the BK? If so we even thought about borrowing money from relatives to pay off the BK completely, but I was told we would have to wait at least 3 yrs into the BK. It's like a catch 22. We have a 6mth old son and we are just trying to start a modest life. I'm now contemplating voluntarily dismissing the BK and try settling w/ the creditors myself. Any thoughts/advice?

A couple of questions, 1) Is your plan a 100% payback plan? 2) How much debt is owed?

Comment: These issues should have been thought out prior to filing BK. You could have gotten your house before the BK, waited a period of time, then filed.

Your wife probably hasn't even got past the point where creditors are allowed to object. It would be much wiser to not dismiss your case. Your not allowed to file again for 2 years I think, and the creditors know this...why would they work with you now? They can come at you with both barrels, and you will have no silver bullet in your shot gun for them to be afraid of.

[cnet2k]

I believe it's 75% payback. It was actually a chapter 7 that was dismissed and then rolled into a 13 as a last resort. I see what you mean about the creditors..point well taken. But if I (just me) purchase a house, will it affect the BK? Do you know the logic to why they would not allow an early payoff?

[aa06a47]

I believe it's 75% payback. It was actually a chapter 7 that was dismissed and then rolled into a 13 as a last resort. I see what you mean about the creditors..point well taken. But if I (just me) purchase a house, will it affect the BK? Do you know the logic to why they would not allow an early payoff?

An early payback will be 100%. They will allow early paybacks, but only if you come up with 100% of what was owed, plus the trustee fees and any attorney fee's financed in the plan. Once you get past 3 years, some trustee's will let you pay the "pot" plan back. Under the new law though, the lenght of "all disposible income" has went from 3 years to the entire 5 years. I would be very surprised if early paybacks were allowed when we get 3 years down the road with current BK's unless they are 100% paybacks.

As far as if you buy a house, it may depend on the marriage laws of the state. You can sure enough finance the house in only your name, but it will become a legal point if your spouse legally owns 1/2 of the house through marriage. Wouldn't want to go there.

[cnet2k]

thanks AA. At least I know now that it can be paid early, but at 100%. I'm not sure why my lawyer was telling us otherwise??? I don't really think he is fighting for us...