Legal Question in Bankruptcy in Texas

lump sum payment

My wife and I are currently in a chapter 13 plan. We are considering retirement and can receive a partial lump sum payment from our teacher retirement plan. Can we use some of this amount to pay off our plan early, or would this money just be applied as extra payment into our plan, also Is Social Security money exempt from being used to repay chapter 13 payments if social security and state penison funds are sole source of income.


Asked on 7/23/07, 11:09 am

1 Answer from Attorneys
Keith Engelke Law Office of S. Keith Engelke

Re: lump sum payment

You need to see a bankrupty lawyer before making extra payments into a Ch 13 plan. At the very least, contact the trustee's office with your question.

Part of your plan payments are interest, which would not be owing if you prepaid.

Since retirement would reduce your income, and your ability to pay into the plan, the easist solution is not to retire until you pay off the plan.

You really need to sit down with a bankruptcy attorney and figure out if this is something you can afford to do.

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Answered on 7/24/07, 2:19 pm


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