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BKlaw Attorney
BKlaw Attorney, Attorney
Category: Bankruptcy Law
Satisfied Customers: 2
Experience:  24 Years
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we are in chapt. 13 under 2 years, we have an early pay off

Customer Question

we are in chapt. 13 under 2 years, we have an early pay off penalty of 3 years and 34,000.00. we have 5 secured debts totaling 23,269.41, (13,640.00-mortg 1 arrear., 4366.00 mort. 2 payback, 1629.95 back txes, 1816.26 vehicle 1, 1816.26 vehicle 2) we are selling our home for 128,000.00 (poss.) what will be paid with that and will our bankruptcy status change?
Submitted: 7 years ago.
Category: Bankruptcy Law
Expert:  BKlaw Attorney replied 7 years ago.
With the limited information provided and a notation that some states have their own "individual" rules, the 2 mortgages would be paid off before you receive any of the sale proceeds IF they are secured by the home being sold. The taxes are considered a priority debt and would be paid first after any administrative costs (Trustee's fees) then the autos would be paid and the balance to you. I would suggest dismissing the Chapter 13 before the sale (which you have the right to do (with some exceptions)) which would allow you to pay who you want when you want. This would also cut or stop the administrative costs of the trustee saving you money.

Wish you the best