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Anthony & Judith Archer, Ch. 13, BK05-85920 (July 20, 2007)

The debtors, who were operating under a confirmed five-year Chapter 13 plan, wanted to refinance their house and pay off the plan early. The trustee objected on the basis that § 1325(b) requires debtors to make payments for the stated time period in the plan regardless of their ability to make total plan payments in less time. The court overruled the trustee’s objection, stating:

“In a case such as this, the confirmation requirements have already been met. The only change now appears to be the debtors’ desire to make a lump-sum payment of the balance due under the plan to be done with it. There is no indication of bad faith on the part of the debtors. In fact, the debtors are refinancing because their existing variable rate loan has caused their home mortgage payment to increase by $226 during this bankruptcy. There appears to be no good reason to defer ready payments simply to stretch the case out for another three years to its original completion date. Cash in hand is always worth more than the promise of future payments, and there is no evidence that anyone will be harmed by an early completion of the plan.”

Friday, July 20, 2007
Judge Thomas L. Saladino