What Is a Typical Timeline for a Chapter 13 Bankruptcy

A recent statistic published by the United States Courts shows that of the more than 413,000 bankruptcy filings nationwide that year, more than 120,000 were Chapter 13 ones. This is less than half the amount (which was more than 288,000) filed for Chapter 7 bankruptcy that year. Chapter 13 bankruptcy is, thus, the second-most popular option among consumers strapped with debt. 

This type of bankruptcy is popular among debtors because it allows them to hold on to many of their valued assets they’ve fallen behind in paying off, such as a home, by modifying certain repayment terms or catching up missed payments over time. This type of bankruptcy generally also allows for the discharge of unsecured debts, like credit cards, medical bills, or other personal loans,if you complete all of your required chapter 13 payments. If you’re considering filing for this type of debt relief, you may wonder what the typical timeline is for a Chapter 13 bankruptcy. We’ll answer that question below.

How Long Chapter 13 Bankruptcies Take From Start to Finish

If you’ve researched the answer to this question elsewhere already, you may have seen a lot of different answers. One of the most common ones may have been that pursuing a Chapter 13 bankruptcy takes anywhere from three to five years. However, that’s generally just how long repayment plans last and not an estimate of how much time you will have to spend attending court proceedings or filling out paperwork. Often times, once the initial stages are complete, the demands on your time lessen. 

Below, we’ll share the different stages in Chapter 13 bankruptcy cases and whether there are any time limitations on how long you, the creditors, or the trustee have to address each of the concerns, factors which may help you better gauge how long it may take to fully see your case to completion here in North Carolina. 

Understanding the Steps in the Reorganization Bankruptcy Process

Unlike a Chapter 7 bankruptcy, which involves the liquidation of assets to repay creditors, Chapter 13 is a reorganization of debt, which means you come up with a plan for repaying any outstanding debts in exchange for being able to hold on to them (so long as you continue making payments under the new terms). 

It can be helpful to understand the steps in a Chapter 13 bankruptcy case, as this can give you a better idea as to how your legal matter may take to see it to a conclusion. 

The pre-filing timeline is best described as variable as it’s contingent upon you and how fast you complete research, make decisions, gather information, and complete requirements, such as the following: 

• Reviewing the different debt relief options and requirements to pursue them
• Deciding to file bankruptcy and meeting with an attorney to prepare for filing
• Compiling information, such as banking and other account numbers, a list of assets and debts, and monthly income and expenses
• Completing mandatory credit counseling, which discusses bankruptcy and alternatives to it
• Filing your petition and plan with the United States Bankruptcy Court in the Eastern District of North Carolina (if you reside in or around Raleigh to the coast)

Once you’ve submitted your bankruptcy filing documents, that’s when a much more stringent timeline established by the Court goes into effect, which includes:

• Filing a repayment plan with the Court: While some debtors will elect to do this when first filing their Chapter 13 bankruptcy petition, those who don’t must do so within 14 days of having done so. This plan is a schedule of payments. Among other details, it should outline a fixed amount you, as the debtor, plan to pay the trustee each month.
• Submitting supporting documents to the trustee: This includes any documents referenced in Section 521 of the U.S. Bankruptcy Code, including pay stubs and tax returns, plus any other documentation requested in the letter received from the Court. Those documents must generally be submitted to the trustee at least seven days prior to the 341 meeting of creditors, the date of which will be outlined in that letter. Generally, this means that you have no more than 21 days from the time you originally filed your bankruptcy petition to produce this documentation.
• Attend the first meeting of creditors: This can occur as soon as the 21st day or as late as the 40th day after you file for bankruptcy, and your attendance at it is mandatory. This meeting provides creditors with an opportunity for both creditors and the trustee to ask you, as the debtor, under oath, questions about any of the filing documents, known as schedules, that you’ve completed and to inquire about the feasibility of your proposed repayment plan. 
• Start making payments to the trustee presiding over the case: In the Eastern District of North Carolina, this occurs on the first of each month, whether your plan has been approved by the Court or not. 
• Your plan is confirmed: This can happen after you complete your 341 meeting of creditors if no one objects to your plan, or after objections are resolved. 
• Completion of the debtor education course: This can be submitted to the Court as soon as within 45 days of the 341 meeting, which equates to approximately 75 days after the case’s initial filing and is mandatory for all filers. 

As mentioned above, given how repayment plans are required to at least 36 months, but no more than 60 months, what’s left of the next three to five years after you start making payments comprises the bulk of the rest of the timeline in your Chapter 13 bankruptcy case. 

Provided you’ve satisfied your pre-agreed-to schedule of payments, the following steps wrap up the Chapter 13 bankruptcy process:

• A trustee files their final report: All interested parties are given 33 days by the Court to object, or otherwise, the report gets approved.
• Mortgage motion: If you have been catching up past due mortgage payments on your home through your chapter 13 plan, the trustee files a motion to deem your mortgage current, and establish the current loan balance and next payment due dates. 
• A Notice of Intent to Enter Discharge gets filed: This occurs after the trustee’s final report is approved and is the Court’s notification to interested parties that they plan to issue the discharge, which they have 14 days to object to.
• The discharge is entered in: Once those 14 days pass after the trustee produces the Notice of Intent to Enter Discharge, the discharge occurs. Once this occurs, creditors are prohibited from collecting certain debts. Provided a debtor was party to a 5-year repayment plan, this step generally occurs at the 66-month point after their initial Ch. 13 bankruptcy filing.
• The Court issues its final decree: This step occurs at the 14-day point after a discharge is entered, provided that there are no other post-plan follow-throughs that need to occur. So, all of this should occur no later than the 67th month after you file unless special circumstances apply to your case.

As you may have noticed above, the timelines shared above don’t account for weekends or holidays. They also don’t account for potential scheduling conflicts or extenuating circumstances. Thus, the deadlines established by the Court may not align exactly with those described above, but they should fall within their general ballpark.  

Getting Help in Navigating the Chapter 13 Bankruptcy Filing Process

Making the decision to file for this form of debt relief could be described as the easiest part of the process. Compiling documentation, preparing a repayment plan, and knowing what to say or do at different steps along the way can be confusing to most debtors. This is where having the support of an attorney who helps consumers file Chapter 13 bankruptcy every day to assist you. 

We can help guide you through most of the steps above and handle those on your behalf that do not require your personal appearance. 

We hope that this typical timeline for a Chapter 13 bankruptcy helps you. However, know that we’re here for you if you have additional questions regarding your unique situation. 

Here at Biggs Law Firm, it costs you nothing to discuss your debt situation with our legal team to verify that this is the right bankruptcy option for you. So, call or email our firm now. It’s the first step to putting your debt woes behind you.