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How Long Will a Chapter 13 Bankruptcy Case Take?

During a Chapter 13 bankruptcy, a person is allowed to keep their property and in exchange agrees to pay off a portion of their original debt. An individual’s unsecured debts are reduced and restructured into a payment plan that can last anywhere from three to five years depending on an applicant’s total income and how much is owed. After the repayment or commitment period has ended, a person’s case will end and any remaining debt will be cleared. Additionally, a Chapter 13 bankruptcy will appear on a credit report for seven years and an individual may be eligible to file a second time after a 6 year period.

Two main factors which determine the length of a repayment plan include:

  1. Total income: A person’s total income is typically the first factor that is considered. An applicant who makes less than the median monthly salary in the state will qualify for a repayment period of three years. Those who make more than this amount will typically be put on a five-year repayment plan.
  2. Time needed to complete payment: A person who qualifies for a three-year schedule may still request a five-year plan if they can show that additional time within the bankruptcy process will allow them to better meet repayment requirements. Whichever route a person qualifies for, five years is the maximum amount of time a chapter 13 bankruptcy can last.

Once a plan is made, it does not mean that it is set in stone. If your financial situation undergoes a drastic change, it could affect the overall length of your repayment plan. For example, if a debtor decides to turn over an asset for which they are unable to keep up payments, the total debt, and thus length of repayment may be shortened. In cases of financial hardship, a plan may be temporarily suspended or lengthened from three to five years.

Questions about Your Bankruptcy? Contact Us!

The decision to declare bankruptcy is never easy and should only be taken after careful consideration of your financial situation as well as any available alternatives. Whether you are seeking freedom from debt through chapter 13 or chapter 7, our Muncie bankruptcy attorneys can help you to navigate the legal process. At Jackson & Oglesby Law LLC, we focus exclusively on the practice of bankruptcy law and have helped hundreds of people in your situation to secure a fresh financial start. We understand that bankruptcy can be complicated which is why we strive to help new clients understand their options in a free consultation.

Call (888) 713-5148 and speak to an attorney today. Weekend and evening appointments available.