The core feature which separates Chapter 13 from Chapter 7 bankruptcy is the Chapter 13 “reorganization” or repayment plan. This repayment plan is designed to help debtors keep their property in exchange for gradually repaying a certain portion their debts, typically over the course of three to five years. But what if you don’t want to wait that long, and prefer to get your payments out of the way up front? Is it possible to complete the repayment plan ahead of schedule? In this entry, our bankruptcy lawyers
will explain some of the potential obstacles to early Chapter 13 repayment, and explore alternative methods of modifying your payment plan.
Reasons to Avoid Paying Your Chapter 13 Creditors in Advance
Most people would logically assume the sooner they can pay off their Chapter 13 debts, the better. The creditors get their money, the debtor is released from their obligations, and the case concludes that much sooner: a win-win situation for all parties involved.
Or at least, that’s what one would think. While early repayment is not necessarily impossible,
there are some potential stumbling blocks which debtors should be aware of.