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How long do you have to make payments for a Chapter 13 filing?

On Behalf of | Sep 24, 2021 | Bankruptcy

The kind of bankruptcy you file determines how quickly you can receive a discharge and even how long the discharge will stay on your credit report. Many people in need of debt relief will file either a Chapter 7 or a Chapter 13 bankruptcy.

There are some very big differences between Chapter 7 and Chapter 13 bankruptcies. While both are popular options for individuals who need help with debt, Chapter 13 Bankruptcy will take longer because it requires a repayment plan.

However, there are many benefits that come from a Chapter 13 filing, including the ability to protect your property and the right to file with higher levels of income. During the replacement., you will have to spend almost all of your disposable income to repay creditors before you’re discharged. How long will those payments usually last?

Your repayment plan is a reflection of your financial circumstances

Exactly how much you pay to your creditors and which creditors receive money from your monthly payment plan will depend on your finances when you file for Chapter 13 bankruptcy.

The trustee assigned by the courts will help review your finances and negotiate a repayment plan with creditors during a meeting. After that, they will receive your monthly payments and distribute the funds to the various creditors. You may need to continue making payments every month for between three and five years depending on the term set for your repayment plan.

However, once you finish making all of those payments, you will be eligible for the discharge of the remaining balance is on those accounts. Understanding how Chapter 13 bankruptcy works can help you choose the right kind of bankruptcy for your needs.