Paying car off early

[ilbcertain]

We filed a 3 year chapter 13 back in 2010 and finished it up last month. We decided to keep our car and knew the payments ( $500 ) would extend past the 3 years until the car was paid off. We never had any problems making payments and basically never heard from the trustee except our yearly statements.

We still owe around 6K for our car, witch is fine. We are wondering about pooling as much money ( income tax ) as possible each month to send to the trustee in addition to our monthly payment to get this paid off ASAP so we don't have to wait another year to end this.

Is it OK for us too do this? we don't want to raise a red flag and have the trustee contact us for anything, just want to stay incognito and continue making our monthly payments.

Thanks for taking the time to read

[TheBajan]

We filed a 3 year chapter 13 back in 2010 and finished it up last month.

This is a bit confusing. You indicate that you filed and finished your plan. Yet later it sounds like you are still making payments? Please clarify so we can offer good advice. Is your ch 13 complete or are you still making payments? If you are still making payments, how much longer before you are finished?

[LadyInTheRed]

Yes, that is confusing!

If you finished your Chap 13, you should start making payments directly to the lender, not to the trustee. Make sure you resume making those payments so you don't end up in default!

When you have the cash to pay off the loan, ask the lender for a payoff amount. They will give you an amount that will include interest through a certain date to give you time to get the payment to them.

[ilbcertain]

let me see if I can clarify. When we filed chapter 13 back in 2010 we had just recently bought a car a year or so prior. The lawyer asked if we wanted to keep the car or give it back to the bank, we opted to keep it. He put us on a 3 year re payment plan at 500 per month ( for everything, including the car) he told us that when the 3 year repayment plan was over that there would still be money owing on the car and that all of our monthly payment would go directly to it until it was paid off. The bank was not going to give us the title because it was too new and we still owed around 6K. Can I send in extra payments here and there to pay this off early? we don't want to wait another year of this, we just want to be done.

[TheBajan]

Referring back to what LadyInTheRed mentioned, once you have completed your plan, you stop making payments to the trustee. If you still owe money on an asset that you kept, such as your car or a house you didn't give up, then you need to keep paying for it. However, you go back to paying the lender directly. The trustee is no longer involved. To answer if you can make extra payments or pay it off early, you would have to refer to your lender. I would agree with Lady's suggestion and tell you to bank the cash and when you have enough to pay it off, then do so.

[LadyInTheRed]

If you made your last payment to the trustee last month, then you probably have a payment due on the car pretty soon. For the moment, focus on making sure you start making the monthly payment by the due date. Worry about pay off once your first direct payment is made.