Under the Bankruptcy Code, you must send all your disposable income to the Trustee for a minimum of 3 years and in some cases for up to 5 years. Your disposable income is the amount left over after you subtract your reasonable and necessary living expenses from your net income.

Your monthly payment is spelled out on the first page of your Chapter 13 Plan. Sometimes it will take more than 3 years to complete your plan. There is, however, one significant exception to the “three year rule.” You may pay off your plan before 3 years if you pay all creditors who have actually filed claims 100%. Often this total is considerably lower than the amount that your actually owed before fling.

If you can’t pay the full 100%, you must make your plan payments for at least 3 years before you are eligible for discharge. You can ask to pay off your plan after 3 years only if you can pay 100% of what is due to the creditors who must be paid during the life of the plan. These include secured creditors; priority tax claims and sometimes back child support. Paying off your plan early can be tricky and you should check with your attorney before you contact the Trustee.

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