New to Chapter 13

[brass598]

Just started the process of Chapter 13 BK in NJ. lawyer had us close all our banking accounts and open up a new one.
Recieved call this AM (8:00 AM ) from creditor told them to contact my attorney,
Sad to say if felt great.
lawyer said we will keep our home ( thank G-D) and our car other than that everything will go away in 5 years.
Question??
Can we pay the settlement amount quicker, what I mean is can we double the payments once things get easier ?

[mountanddo]

I would guess that if you are able to double up on your payments then the court is going to modify your plan to include that and increase your monthly payments. You have to remember that you are in Chapter 13 and all your disposable income is supposed to go toward paying off that debt. I would take any extra money and save it for emergencies because within five years there will be one. If you are thinking your are able to double up on your payments after filing then you either are not being realistic about your budget or you are anticipating an increase in income which may change your plan as well.

I know that when my attorney told me what my monthy payment might be I was pretty excited because they actually let me budget in for entertainment and more money than I ever spent on groceries. In the last year I have spent 0 on entertainment and only half of what they allow for groceries. I plan to continue this and live on a VERY tight budget for the next 3 years and save any extra dime I have in case something happens. I am working temporary so if I lose my job and am not working for awhile I want to be able to have at least 3-6months saved for my Chapter 13 payment as I don't want to risk having it dismissed should I miss a payment.

Chapter 13 isn't a loan where you can just pay it off early. All this being said, If I have said something wrong someone please correct me!

[Guest123]

If you are in a 100% payback then YES you can pay as much as you want to pay it off early. If you are not you may just end up paying unsecured creditors more while still paying for the 5 years.
I would just save the extra cash for emergencies or entertainment.

[mountanddo]

Forgot about the 100% payback plan, sorry about that.

[justbroke]

Can we pay the settlement amount quicker, what I mean is can we double the payments once things get easier ?

If you are referring to your "disposable monthly income" (DMI) payment as a settlement amount, then take extreme caution! Unless you are in a 100% plan, paying more doesn't "pay down" the so-called plan base (expected plan payback)!!! You must either pay the DMI payment every month for the length of your plan, or 100%... whichever comes first.

There are people who have found out the hard way, that extra payments and even surrendered tax returns, did nothing to end their Chapter 13 Plan early. Please discuss this with your attorney.