IfI file for Chapter13, canI offer the whole amount upfront?

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IfI file for Chapter13, canI offer the whole amount upfront?

I’m highly in debt andwant to file a Chapter 13 at .10 on the dollar. I’ll pay about 18,000. I have an uncle that will give me the money to do a Chapter 13 and offer the full amount at one time instead of doing a repayment plan. Is this an option? He will not give the money to me to just pay on the bills do to us being unable at this time to keep up on all the payments. So this is the only option for this money. Do the trustees allow this type of settlement?

Asked on November 25, 2010 under Bankruptcy Law, Ohio

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

No, trustees do NOT allow that type of settlement in a chapter 13. A chapter 13 bankruptcy IS a payment plan bankruptcy--there's no point in filing one if you don't want to do a repayment plan, since the whole point of a 13 is to come up with a plan that will see you paying the most you can each month for a period of 3 - 5 years.

*Possibly* in a chapter 7, you can do what you propose, but the money would probably need to be transferred to you or at least committed in some certain way to you--and you other assets (home, car, bank account, etc.) would also be considered as available to pay creditors, at least to the extent there are no exemptions for those assets.

You should speak with a bankrutpcy attorney about how best to use your uncle's generosity to discharge debts in a bankruptcy filing.


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