Less Than 100% Dividend Can a Chapter 13 Plan be Paid off Early?

By Stacey A. O’Stafy, Staff Attorney, Office of the Chapter 13 Trustee Faye D. English (Columbus, OH)

An above median Chapter 13 debtor settles a workers’ compensation claim and wants to use the exempt settlement proceeds1 to pay off her 100% dividend plan in month 38 – can she? In this simple scenario, the answer is yes. Pursuant to 11 U.S.C. § 1325(b)(4)(B), the applicable commitment period “may be less than 3 or 5 years, whichever is applicable under subparagraph (A), but only if the plan provides for payment . . .

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