Can You Pay Off Your Chapter 13 Plan Early in Florida?

In this article, you can learn…

• Whether you may be able to pay off a Chapter 13 plan early.
• If there are any risks to paying off your Chapter 13 plan ahead of schedule.
• How to evaluate whether the early payoff of a Chapter 13 plan is in your best interests.

Can I Pay Off A Chapter 13 Bankruptcy Plan Early?

Yes, you can. However, if you want to pay off a Chapter 13 plan more than a year in advance of your case closing, you will probably find that the trustee will insist you pay off the total amount of debt you have, as opposed to what you owed the bankruptcy court under the Chapter 13 plan.

If you pay off the plan early but within the last year of your bankruptcy plan, you will only have to pay what you owe under the plan. Early payoff speeds up the discharge process, leaving you free to move forward sooner.

What Risks Should I Consider Before I Pay Off A Chapter 13 Case Early?

If you have the money to pay off your Chapter 13 case early, there is not a lot of risk. If you need the protection of bankruptcy during the time your case is open, however, it would be best not to repay early, as that would close your case and end your protection.

Furthermore, if you pay your plan off too early, you’re probably going to wind up paying more than you initially intended to pay. To avoid this outcome, it’s best to reserve early repayment for the last year of your case being open.

Attorney Alec Solomita is a determined, skilled bankruptcy law attorney serving Florida. Since 2007, he’s helped clients just like you navigate creditor objections with skill, professionalism, and efficiency.

Have questions about bankruptcy, or in need of legal representation? Reach out to Solomita Law, PLLC for an initial consultation today.

How Does Early Chapter 13 Payoff Work In Hardship Situations?

While some circumstances may allow for an early payoff, for the most part, the Chapter 13 trustee will expect you to pay back your debts in accordance with the repayment plan, regardless of whether you are facing financial hardship.

Are There Common Misunderstandings That Bankruptcy Filers Have About Early Payoff In Chapter 13?

Many people who file aren’t aware of what happens when you pay off the plan too early. If your plan states that you have to pay $500 per month for 36 months, realize that this doesn’t represent the total debt you owe, but an agreed-upon portion of it. When you pay your plan off too early, you will now be expected to pay off the full amount of debt, which may be far more than the $18,000 you’d pay under your plan.

How Should I Evaluate Whether Early Payoff On A Chapter 13 Plan Is The Right Decision Or Not?

Every situation is different. Two situations that could warrant an early payoff might include…

1. If you expect to come into a lump sum of money, it may make more sense to close out your repayment plan early and have that behind you.
2. If you’ve entered into bankruptcy to delay a foreclosure and have found a way to handle your mortgage, early payoff may be a sensible move.

In each case, it’s best to talk to your bankruptcy attorney about what would be best for you given your circumstances, the number of creditors you have, and any expected, upcoming changes to your financial situation.

Still Have Questions? Ready To Get Started?

For more information on Chapter 13 bankruptcy, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (407) 255-7458 today.