How Long Does The Chapter 13 Process Take To Complete?

The Chapter 13 bankruptcy process, known as a wage earner’s plan, is significantly longer than Chapter 7 due to its nature of allowing debtors to repay their debts over time. Here’s an overview of the timeline and key stages in the Chapter 13 bankruptcy process:

Filing the Petition

The process begins when you file your Chapter 13 petition and accompanying documents, including your proposed repayment plan, with the bankruptcy court. Similar to Chapter 7, an automatic stay goes into effect immediately upon filing, stopping most collection actions against you.

Meeting of Creditors (341 Meeting)

About a month after filing, the bankruptcy trustee will hold a meeting of creditors (341 meeting). While creditors can attend and ask questions, they often do not. Your attendance is mandatory, and you’ll answer questions about your finances and the proposed repayment plan.

Repayment Plan Confirmation Hearing

After the meeting of creditors, a confirmation hearing is held within 45 days. During this hearing, the bankruptcy judge will decide whether to approve (confirm) your repayment plan. Creditors can object to the plan, but if it meets all legal requirements and is feasible, the court will likely confirm it.

Duration of the Repayment Plan

The length of your Chapter 13 repayment plan depends on your income relative to the median income for a similar household in your state:

• If your income is below the median, your plan will typically last three years, unless you propose a longer period, which cannot exceed five years.
• If your income is above the median, your plan will usually be set for five years.

Making Plan Payments

You must start making payments to the trustee within 30 days of filing your bankruptcy petition, even before the plan is confirmed. These payments must continue throughout the duration of your plan.

Completion of the Plan

After you have made all required payments under your plan, which can take three to five years, you must also ensure that you have:

• Completed a financial management course.
• Stayed current on your domestic support obligations, if applicable.

Discharge

Once you complete the repayment plan and meet all other requirements, the court will grant you a discharge of the remaining eligible debts. This discharge releases you from personal liability for these debts and prohibits creditors from taking any collection actions against you.

Overall Timeline

The Chapter 13 bankruptcy process, from filing to discharge, typically takes either three or five years, depending on the length of your repayment plan. The exact duration will depend on your specific financial situation and whether you meet all the requirements set forth by the court and the bankruptcy code.

It’s important to note that successfully completing a Chapter 13 plan requires maintaining a steady income and managing your budget carefully to make consistent payments. The support and guidance of a bankruptcy attorney can be invaluable in navigating the Chapter 13 process and achieving a successful outcome.