Maximum Time for a Chapter 13 Bankruptcy

By Beverly Bird

The amount of your income is a qualifying factor for both Chapter 7 and Chapter 13 bankruptcies. For Chapter 7, it determines whether you're eligible, and with Chapter 13, it affects the length of your repayment plan -- the maximum time is five years. During this period in a Chapter 13 bankruptcy, you must provide the trustee with your disposable income each month, and the trustee uses this money to pay down your debts.

Five-Year Plans

For you to be eligible for the longer, five-year plan, your income must exceed the median income for your state for a family of your size. Depending on the size of your debts and available income, this may lower your payments – your debts are divided into 60 installments rather than 36 – but the downside is that your financial life will be governed by the court for a longer period of time. For example, you can't take on any new debt during your Chapter 13 plan without special permission from the court.

Three-Year Plans

If your income is less than the median income for your state and your family size, you qualify for a three-year plan. If you would prefer a longer time, you can request an extension from the court, but you'll have to present the judge with a good reason. Generally, simply wanting to lower your payments isn't enough.

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When Payments Start

Your first payment is due within 30 days after you file for bankruptcy, even if your Chapter 13 plan hasn't yet been approved by the court. The trustee will hold your money until your plan is confirmed, and then she will turn it over to your creditors.

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Defaulting on Chapter 13


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