Chapter 13 bankruptcy and paying it off early

[mom4scrapbooking]

So that's my question. We are over 3 years into our 5 year plan. My husband is getting a bonus for the first time in years. We are thinking about using it to pay down our chapter 13 bankruptcy. Anybody know the good bad of doing this!

 

[3BoysRDisneyFreaks]

I don't know how the repayment of Chapter 13 works. You are making payments on an agreed upon amount correct? Is there a bonus if you pay off early?
I am sure it would be nice to be done with the payments early so that would be a pro. Do you have a savings started? I might start on that with the bonuses.

Sarah

 

[BCV2003]

Definitely consult with your bankruptcy attorney before contacting your trustee. Your trustee could consider it as income and change your plan base to a higher amount or if you say you want to end it early and are not on a 100% plan they could make you pay your remaining creditors at 100%.

Professional advice is the best thing in this situation.

 

[Golf4food]

Definitely get professional advise from your bankruptcy attorney.

Alternately, just hold onto the money in a savings account as a separate fund you can draw upon if necessary in case something comes up and need to to use it to meet a monthly payment in the future.

 

[jmartinez1895]

you should call the attorney that you used to file because the rules and laws are different for each state. I know that you want to be out from under the payments as soon as you can.

 

[classyseoul]

I agree with everyone else. Check with your bk attorney first. If you're not paying it off completely then I would just open a savings. I'm not sure if it could be considered income since it is not consistent but I don't think the trustee can change anything either way, your attorney is the only one that can amend your bk...from my experience.

 

[jmartinez1895]

I di a quick search and some of the info I found seems to favor not paying off early. A few sites had info that said that if you received a lower payoff amount then what you originally owed before filling then you might have to pay the full pre filling amount if paid early.