Consulting a chapter 13 bankruptcy attorney will help you understand whether or not you can easily pay off your bankruptcy plan earlier than what is expected.
It is understandable if you wish to pay off the repayment plan earlier than the agreed date. This is especially true if your financial health looks optimistic. However, our chapter 13 bankruptcy attorney might recommend not to pay it off earlier.
Keep in mind that your creditors are entitled to receive your income for the duration of your repayment period. In that case, your monthly payment might increase.
The court might not allow in wiping your debt balance if you are unable to pay your disposable income for the whole commitment period. It is like signing a contract. If you wish to get out of it, you need to perform certain things.
Keep in mind that you need to pay your creditors using all your disposable income for up to five years. After completing the period, your unsecured debt balanced would be eliminated.
Failure to accomplish those terms will result in not receiving a discharge.
Creditors Will Object
Paying off your plan earlier would need to get court approval. That’s why it is best that you contact our chapter 13 bankruptcy attorney to know more about the consequences of paying the plan earlier.
It is most likely that your creditors will oppose your proposal of an early payout. One of the reasons is that your creditors will think that you wish to avoid paying more because of an increase in your income. Keep in mind that as a chapter 13 bankruptcy filer, you will have to live frugally.
Now, your creditors will argue that any funds you have to pay off the plan will be used to boost the payment to them, rather than shortening the period. They also state that paying off your debt earlier than the term would mean that they lose all the benefits associated with your disposable income.
Now, if the court agrees with the creditors, the court will order you to increase your payments to show increased or added income.
However, you can still finish the term earlier if you have paid your creditors 100% of the claimed amounts. That is, you need to pay off everything that you owe. If you do so, you will no longer require a discharge.
It is also possible to request an early discharge because of extreme financial problem. The court might agree to end your plan earlier if your case does not seem to improve. Talk to a chapter 13 bankruptcy attorney to know more about how to file a hardship discharge.
If you have met the criteria, the court might conclude your plan early. You receive a hardship discharge and eliminate your unsecured debt.
Before you apply for a hardship discharge, make sure that you contact our Karine Karadjian law firm. Our chapter 13 bankruptcy attorney will give you the proper assistance so you can go through the entire process and avoid falling into financial misery. Contact us today for a free consultation (818) 918-9660