Can I pay off a Chapter 13 bankruptcy early?

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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

Answers:

Terence Fenelon / Law Offices of Terence Fenelon

Answered 9 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.


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