Dealing with overwhelming debt can be stressful, and sometimes there’s no way out. If you’re considering filing for Chapter 13 bankruptcy, you probably wonder how long the process takes. In this article, we’ll overview Chapter 13 bankruptcy, walk you through the timeline, and help you understand the factors affecting the process. Let’s dive in!
Quiebra del capítulo 13, often called a “wage earner’s plan,” allows individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years.
To qualify for Chapter 13 bankruptcy, a debtor must have a regular source of income and unsecured debts below a certain threshold. Additionally, the debtor must not have filed for Chapter 13 bankruptcy within the last two years or Chapter 7 bankruptcy within the previous four years.
Before filing for bankruptcy, you must complete a credit counseling course from an approved agency no later than 180 days before filing. This course will help you evaluate your financial situation and explore alternatives to bankruptcy.
Once you’ve completed the counseling, you can file a Voluntary Petition with the bankruptcy court. Along with the petition, you’ll need to submit a proposed repayment plan, a statement of financial affairs, and a schedule of assets and liabilities.
Filing for bankruptcy triggers an automatic stay, temporarily halting most collection actions against you, such as wage garnishments and creditor lawsuits.
Approximately 21 to 50 days after filing, you’ll attend a meeting of creditors, also known as the 341 meeting. During this meeting, the bankruptcy trustee and any attending creditors can ask questions about your financial situation and proposed repayment plan.
The length of your repayment plan depends on your income and the amount of debt you have. Your plan will generally last five years if your income exceeds your state’s median. Your plan will typically last three years if your income is below the median. However, there are exceptions, and the court can extend the plan up to five years if necessary.
Within 45 days after the 341 meeting, the bankruptcy judge will hold a confirmation hearing. Most confirmation hearings are before your Chapter 13 Trustee, who attempts to resolve all uncontested issues. You will rarely interact with the Judge while in bankruptcy. At this hearing, the Chapter 13 Trustee will determine whether to recommend your plan for confirmation, continue the hearing for further inquiry, allow specific deadlines to pass, or seek dismissal of your case. If the plan is confirmed, you must continue making your plan payments and comply with all bankruptcy requirements to obtain a discharge.
You must make regular payments to the bankruptcy trustee throughout your repayment plan. Your first plan payment is due within 30 days of filing your bankruptcy petition. Please make these payments to avoid the dismissal of your case.
Once you’ve completed your repayment plan and complied with all bankruptcy requirements, including completion of the Debtor Financial Management Course, you’ll receive a discharge of your remaining eligible debts. The discharge effectively wipes out your obligations to pay those debts.
There are several advantages to filing for Chapter 13 bankruptcy, such as:
However, there are also some downsides, including:
Before filing for bankruptcy, it’s essential to explore other options, such as:
The length of the Chapter 13 bankruptcy process depends on several factors, including your income, the amount of debt you have, and the terms of your repayment plan. In general, the process takes three to five years to complete. While Chapter 13 bankruptcy offers some benefits, weighing the pros and cons and considering alternatives before deciding to file is essential.
Robert Stiberman es un abogado especializado en quiebras con amplia experiencia en Quiebra del capítulo 13 casos. Ha representado a numerosos clientes en casos de quiebra y está bien versado en los requisitos de los fideicomisarios del Capítulo 13. Con su conocimiento y experiencia, Robert Stiberman puede proporcionar a sus clientes con la orientación y la representación que necesitan para navegar con éxito la bancarrota.
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