How to Pay Off a Chapter 13 Bankruptcy

Chapter 13 is when the borrower appeases the collector without abolishing his assets. In order to file for Chapter 13, you must have ample amount of money to pay monthly payments over a three to five year timeframe. Payments are then paid to the bankruptcy executor, or trustee who will then divide the money between the different creditors. Paying off your Chapter 13 depends on the amount of the original debt.

• Preserve the job that you have, or get a job if you do not have one. It is important to pay the monthly payment. Failure to pay the agreed upon amount will result in the Chapter 13 turning into a Chapter 7, where all of your assets will be used to repay the debt.


• Talk to your attorney or trustee who handles the bankruptcy about possibly making extra payments. This will allow you to pay the debt quicker.


• Contemplate whether you can put a lump sum down so that paying it off early can put your mind at ease. If the debt was made into smaller payments, that you were able to pay early paying of the plan can lead to compromising the plan. This could end up making you pay more than you need to.


• Pay off your Chapter 13 early if you are able to. Make sure though you talk to the trustee or attorney can approve that the ceditors will not be affected by an early payoff.


• Confirm that the trustee or lawyer validates if your ceditors will be paid off fully. Most cases you will have to pay the original amount owed to the creditors if you choose to pay the debt off early.