It can be difficult to make payments towards your Chapter 13 bankruptcy, and we understand. Repayments under this type of bankruptcy can take up to three to five years. It’s always a good idea to seek advice from a Jacksonville chapter 13 lawyer. You might consider paying Chapter 13 early if you have a large cash flow, such as an inheritance or lottery winnings. Be aware of the consequences of making a lump-sum payment to avoid Chapter 13 bankruptcy.
Do I Have To Pay My Chapter 13 Plan Off Early?
In most cases, it is not a good idea to pay Chapter 13 early. Chapter 13 debts that you owe creditors are required to be paid back 100 percent if you pay them off early. Your bankruptcy trustee will help you decide the amount of debt you can pay to creditors when you file Chapter 13 as well as speaking to a Jacksonville chapter 13 lawyer.
The court may require payment of 70 percent instead of requiring repayment of 100 percent of the debt in bankruptcy claims. The amount you are required to pay depends on your assets, income, and expenses. After you have completed your Chapter 13 repayment plan, you will be able to discharge the remaining 30% of your debt. You won’t need to repay it.
You can alter the terms of your bankruptcy case if you pay off your Chapter 13 bankruptcy plan early. You’ll now be responsible for paying your creditors your entire original debt, plus any amount that would have been discharged. It is easy to understand: If you can afford a lump sum payment, you should be able to continue to make monthly payments until all balances have been paid.
In 4 Easy Steps, How To Pay Chapter 13 Early
Jacksonville chapter 13 lawyer: Here are four steps you can take if paying down your Chapter 13.
1. Verify That Your Finances Are Safe
To finally get rid of debt, it can be tempting for you to use all your wealth towards your bankruptcy repayment plan. It is possible to pay off your Chapter 13 debts early by putting a lot of money towards it. However, be careful. You should also ensure that your finances are in order. This includes being able to pay for your essential expenses like housing, food, and utility bills.
2. Ask For Early Payment From Creditors
You don’t have to pay your Chapter 13 bankruptcy trustee a lump amount in order to get your case closed early. First, you will need to request early payment from all creditors. The court will then approve your request. Creditors can then either accept or decline your request. Most creditors will not approve of you paying Chapter 13 bankruptcy early, as it is against the repayment plan.
3. Wait For The Court To Make A Decision
Your monthly payment may be affected if the court decides in favor of creditors and denies an early payoff — which can often happen. Your discretionary income is a part of the amount you pay for Chapter 13. Your discretionary income is earned when your income increases and you pay the same costs for approved necessities. The court may increase your monthly payments if this happens.
4. Pay Your Entire Original Debt
If a court approves your request to pay Chapter 13 early, you will be required to pay 100 percent of your bankruptcy case’s debt claims. This includes unsecured debt such as credit cards that would have been discharged if the Chapter 13 plan payments were made on the original schedule.
Last Considerations For Chapter 13 Plans
When you are considering whether Chapter 13 bankruptcy early payment is the right decision for you, keep in mind that a bankruptcy case still remains on your credit report for seven years after the date you of filing for Chapter 13 bankruptcy. You can’t clear your credit history earlier by paying off early. Only a few cases are exempt from Chapter 13 bankruptcy. However, your trustee or Jacksonville chapter 13 lawyer will need to investigate whether there is one in your area. If you don’t want your monthly Chapter 13 payments to increase, it is more likely that you will stay the course.
Contact Bruner Wright P.A.
Bruner Wright P.A. is a top-rated experienced law firm servicing the Florida Panhandle and the South Georgia area. Our practice has been very successful in helping people discharge their debts and handle both bankruptcy and foreclosure. We offer a personal service that is comprehensive and thorough in all aspects of our industry. We are responsive to the needs of our clients.
Our Service Areas
- Tallahassee Fl
- Douglas Ga
- Brunswick Ga
- Augusta Ga
- South Georgia
- The Florida Panhandle
Contact us today to schedule a consultation to speak to a bankruptcy attorney about bankruptcy and foreclosure. A member of our team will review your case to help you make the right choice. We are focused on personal chapter 7 bankruptcy, chapter 13 bankruptcy foreclosure, and business bankruptcy chapter 11. We want you to achieve financial stability.