What Does the Life of Chapter 13 Bankruptcy Look Like? (36-60 month overview)
What does life in a Chapter 13 plan look like? The Chapter 13 plan is a series of 36-60 monthly payments that are supervised by a Chapter 13 Trustee. The Chapter 13 case is designed to be a powerful “custom” solution to reorganize your debts into an affordable payment plan.
The Chapter 13 Plan: What does it look like?
Your Chapter 13 plan will address ALL of your debts. Your Chapter 13 plan carefully describes how each of your debts will be “treated.’ Many options exist in the plan for various types of debts.
For instance, a car loan’s treatment could be simply to pay it in full (but with much better terms). Alternatively you can just pay the market value only (in some situations). Other times you may just decide to “surrender” the car back to the creditor and not repay it.
Leases can be accepted or rejected. Mortgages can be paid by the trustee and repaired. Taxes can be repaid without interest. Certain liens and mortgages can be “avoided.” Chapter 13 plans are very “custom” and offer many options. These are just a few of the possibilities.
The Plan in Operation: What does the 36-60 month payment plan look like?
The duration of your Chapter 13 plan is usually for 36 to 60 months. During this time, you will make a payment directly to the Chapter 13 trustee each month. Many times to make it easier, it will be automatically removed from your paycheck. The payment part of the Chapter 13 plan is easy: keep making your plan payments and your Chapter 13 case will be conclude as a total success.
The Chapter 13 Trustee will give an accounting every 6 months to let you know exactly how your payments are disbursed. When the final payment is made, the Chapter 13 trustee will report to the court that your case has been completed. You will receive a discharge of any remaining liability for your debts: you will be debt free.