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How does the Chapter 13 repayment plan work?

On Behalf of | Jul 15, 2022 | Chapter 13 Bankruptcy

When seeking Chapter 13 bankruptcy, the repayment plan plays a crucial role in the outcomes of people’s cases. Submitted with their filing or within the specified time frame, the repayment plan allows filers to propose a schedule for paying back debts to certain creditors over a three-year or five-year period.

Due to the importance that it has in the successful completion of their cases, it benefits people to know what to expect from the Chapter 13 repayment plan.

Making payments

According to the U.S. Courts, Chapter 13 bankruptcy filers must begin making payments as ordered in their proposed plans within 30 days of their case filings. In some cases, the court may have not yet approved the plan within this timeframe. However, even in these cases, people should begin making their prescribed payments to their bankruptcy trustees. Upon approval of the plan, the trustee will disseminate the funds as appropriate.

Completing the plan

Completing the plan as scheduled also affects the ultimate resolution of people’s bankruptcy cases. According to, missed or stopped payments may result in the court dismissing people’s bankruptcy cases. Consequently, they will not receive the support and outcomes they had or would have had if their cases continued. Alternatively, the court will sometimes convert Chapter 13 cases to Chapter 7 cases, which alters the requirements for discharge.

Financial struggles often cause stress and a host of other challenges for those dealing with debt. Options, such as filing for Chapter 13 bankruptcy, may offer even those with steady incomes who might think they have no such opportunities a path toward debt relief and a fresh financial start.


Kingcade & Garcia | A Miami Law Firm