Chapter 1 Refinance
Letter to “Ask Leon”
We had filed a Chapter 13 bankruptcy around a year ago. We have found a lender that will refinance our house including the payoffs for our two cars. Can we just send the payoffs to the corresponding creditors and quit making payments on our plan?
This can only be answered by a lawyer who has reviewed your entire case. If you simply quit making the payments your case will probably get dismissed. A dismissal may be very dangerous, because the you lose the benefits that the Chapter has brought you such as court protection, and probably the elimination of interest and perhaps principal that you owe to unsecured creditors. Moreover, what happens if you dismiss and the loan does not go through? That happens a lot, and it could leave you high and dry!