QUESTION
Can I pay off a Chapter 13 bankruptcy early? How?
Asked on May 15th, 2015 on Bankruptcy - Colorado
More details to this question:
It has not been three years since I filed for Chapter 13 bankruptcy. I am thinking about refinancing my home in order to pay off the Chapter 13 requirements. Is it possible for someone to pay off their Chapter 13 bankruptcy early like this?
6 ANSWERS
There are very few circumstances where you can pay off a CH13 early. Meet with an experienced BK lawyer face to face to get all of your questions answered. If you do not handle this matter correctly, it could trigger an audit, and possibly higher payments for the remainder of your CH13 Plan.
Answered on May 19th, 2015 at 2:41 AM
Bankruptcy Attorney serving Madison, WI
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Richard B. Jacobson & Associates, LLC
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Check with the ch 13 trustee. Districts stand by the requirement that you pay in all your disposable income for the plan period 36 or 60 months.
Answered on May 18th, 2015 at 6:43 AM
Most Chapter 13 Trustees will let you do this if you are willing to pay 100% of the claims filed in your case. This usually is not a good strategy.
Answered on May 18th, 2015 at 5:05 AM
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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If your plan makes 100% payment to creditors, you can pay it off earlier. If it's less than 100%, early payment would just increase the amount paid to creditors
Answered on May 18th, 2015 at 4:41 AM
Debt Settlement Attorney serving San Diego, CA
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Law Offices of Kathryn Tokarska
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Possibly though I'm not sure whether there are potential lenders out there willing to refinance while the case is pending and you may be required to obtain permission from the court before incurring new debt. Also not sure if this is truly a better option over continuing with the Plan. After all, you would be incurring new debt and interest while typically a chapter 13 pays a fraction of what is owed and doesn't provide interest to unsecured creditors.
Answered on May 18th, 2015 at 4:18 AM
Deborah F. Bowinski
You really need to speak with your chapter 13 lawyer and ask these questions. Practices vary significantly from one jurisdiction to the next and from one trustee to the next. This is not the best forum for particular, personalized legal advice.
Answered on May 15th, 2015 at 5:21 PM