Can I pay off a Chapter 13 bankruptcy early?

UPDATED: Jul 16, 2012

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Can I pay off a Chapter 13 bankruptcy early?

I am 3 1/2 years into a Chapter 13 bankruptcy. I just retired, and have taken some money out of my retirement account. how will this affect my bankruptcy claim? Can I use some of this money to pay off the claim? We are currently paying 78% of our debts. I have tried calling my lawyer but he will not return my call. I also want to try to get a loan modification on our house. should I try to do this now, or wait until we’re out of bankruptcy?

Asked on July 16, 2012 under Bankruptcy Law, Virginia


Terence Fenelon / Law Offices of Terence Fenelon

Answered 10 years ago | Contributor

2 questons in one? interesting.

The first question is contingent upon the terms of your confirmed plan.  If it is a " pot" plan, then you may be able to emerge early. If a set payment plan, I would advise you to speak to the trustee to clarify your efforts and intentions.  It is dissapointing that your attorney won't return calls.

The second question is up in the air.  Some lenders won't speak to you if you are in a confirmed plan.  Others will jump at the chance since you have shown your creditworthiness for 3 1/2 years and will emerge from the bankruptcy will no extranneous debt.  It depends upon their internal policies.  Does your state or local county have a home owners assistance program?  If so, I would contact them for further advice.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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