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How long may I need to make payments in a Chapter 13 bankruptcy?

On Behalf of | Nov 8, 2021 | Bankruptcy Reform

Sometimes referred to as reorganization, Chapter 13 payment schedules may last between 36 and 60 months. If you can make on-time payments for a maximum of five years, the court may discharge the balance of your debts, as noted by Bankrate.com.

When filing, petitioners must submit a monthly payment plan. By preparing a realistic budget, you show the court how much you could afford to pay. If the court confirms your plan, you may send payments to the trustee assigned to your case.

When may a trustee accept a late payment?

Chapter 13 bankruptcy payments do not generally include grace periods. After receiving your on-time payment, the trustee distributes it to the creditors in your plan. Those involved agree to not pursue you for debts the court discharges at the end of your payment schedule. This may not occur, however, with habitually late payments.

One check received a few days after its due date may not result in the trustee reviewing your arrangement. If the trustee continues to receive late payments, however, he or she may dismiss your case. With a dismissal, the court may not discharge your remaining debts.

How may an additional hardship affect my case?

Payment plans reflect each petitioner’s current income and expenses. If you run into an unexpected emergency such as an illness or a job loss, you may contact your attorney.

When a change in your financial circumstances occurs, your legal team may work to get your plan back on track. Depending on the severity of the hardship, the court may agree to reduce the number of your payments.

Chapter 13 bankruptcy generally requires creating a budget that includes affordable monthly payments. If you face further hardship, the court may agree to adjust the plan. Maintaining the payment schedule to its end may result in a discharge of any remaining eligible debts.

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