What does 'paying outside the plan " mean and

[Lajazz947]

What are the advantages and disadvantages?

I have looked for info on the subject and cannot find any.

It seems to be applicable to auto's and homes.

My attorney has not brought it up and I thought I might research it to see if it makes sense in our case.

Thanks.

[13bound]

First Off, I'm In A 13.........

What are the advantages and disadvantages?

I have looked for info on the subject and cannot find any.

It seems to be applicable to auto's and homes.

My attorney has not brought it up and I thought I might research it to see if it makes sense in our case.

Thanks.

i pay my HELOC outside the plan straight to b of a. i wasn't late on anything when i filed back in july. i'm just guessing that say i owed a car payment (which i don't) and was way behind, then it would be put into the plan as a secured debt and possibly i could have alot lower payments over the plan without the interest or a reduced rate. again, i'm guessing cause my whole plan revolves around my home equity. i'm sure someone else will have a good answer for you.

[lrprn]

What you pay "inside the plan" (your trustee pays your secured lender for you) or "outside the plan" (you pay your secured lender directly) depends on several things - (1) whether there is an advantage to having the payments made inside the plan, for example, taking your car payments and spreading them out over the five years of your plan to reduce your monthly payments; (2) what the culture of your local courts demands in specific secured asset payments - a few districts have a habit of putting all secured asset payments inside the plan, most allow the filer and their lawyer to put together the payments package that works best for the filer; and (3) in some cases whether you can pay off what is owed in full by the end of your plan (i.e. income taxes).

Keep in mind that whatever is paid inside the plan means that your trustee is going to take his administrative % 'cut' on top of the asset payment. In other words, if your mortgage is $1000/month and your trustee takes a 5% administrative fee every month, that means your monthly Ch 13 payment is going to include the $1000 plus $50 more to pay the 5% trustee admin fee to make your house payment for you.

In most circumstances, unless there's a compelling reason for your trustee to make a secured asset payment for you (and there are definitely times when it does make sense for this to happen), it's usually best to make the payments directly to your secured lenders yourself.

If your lawyer is recommending that your trustee make one or more of your secured asset payments for you while you are in Ch 13, be sure you clearly understand why.

[Flamingo]

The Trustee makes the determination as to what is paid in or outside the plan as to your vehicles or mortgage(s). When the plan is confirmed, all that will be listed in the plan breakdown. Your attorney can tell you ahead of time usually what may or will occur as to your own situation and will propose certain things to the trustee when your Plan is initially submitted. We were current with our secured payments up to the time of retaining our attorney who advised us at that point to stop paying the credit cards and the car payments but to continue paying the mortgage and second mortgage. Our vehicles were crammed into our Plan (they were 3 years old) but our first and second mortgages were paid outside the Plan.