When Does a Payment Plan Start on Chapter 13?

By Beverly Bird

Having the option of filing for Chapter 13 bankruptcy instead of Chapter 7 can be a real blessing if you're worried about retaining certain assets, such as your home or car. A Chapter 13 plan allows you to repay your debts over three to five years in regular installments based on your disposable income. In exchange, the trustee does not liquidate your property to satisfy your debts. But you have to make your payments to the trustee -- and you must do so on time.

The First Payment

Under federal law, your first payment is due 30 days after you file your Chapter 13 bankruptcy petition and proposed repayment plan with the court. Your meeting of creditors, a regular part of all bankruptcy proceedings where the trustee reviews your case, is typically scheduled shortly after this time. You should have made your first payment before you appear for this meeting.

Payments on Secured Loans

If you have a mortgage or a car payment, these secured debts may or may not be included in your Chapter 13 repayment plan. It depends on the rules in your state. If they're paid outside your plan, these accounts must typically also be current by the time you attend your meeting of creditors. If you make your Chapter 13 payments to your trustee but neglect these other loans, the creditors can ask the court for a relief from stay and proceed with foreclosure or repossession regardless of your bankruptcy.

Get a free, confidential bankruptcy evaluation. Learn More
Get a free, confidential bankruptcy evaluation. Learn More
What Happens if I Can't Make My House Payments in Chapter 13 Bankruptcy?


Related articles

How Does Bankruptcy Affect Homebuying?

Bankruptcy can give you a fresh financial start by allowing you to restructure or erase your debts under a court-supervised process. However, your bankruptcy case doesn’t go away once your court process is complete. Bankruptcy stays on your credit report and can hurt your ability to obtain credit in the future, including home loans.

What Happens After a Trustee Bankruptcy Meeting?

A trustee bankruptcy meeting is a normal part of a Chapter 7 or Chapter 13 bankruptcy process. Some debtors get nervous about attending the meeting, so preparation can help. After the meeting, creditors may have questions or objections, so proceed one step at a time until your bankruptcy is discharged.

How to Reinstate a Dismissed Bankruptcy

At the conclusion of your bankruptcy case, you typically will receive a bankruptcy discharge. A bankruptcy discharge means that all of the debts that are included in your bankruptcy case are erased and your creditors cannot pursue collection action against you to enforce the debts, like filing a civil lawsuit. During the bankruptcy case, you can ask the court to dismiss your case, or the court may dismiss your case on its own, and you will not receive a bankruptcy discharge. However, you can ask the bankruptcy court to reinstate your bankruptcy if it is dismissed by the court.

Related articles

Maximum Time for a Chapter 13 Bankruptcy

The amount of your income is a qualifying factor for both Chapter 7 and Chapter 13 bankruptcies. For Chapter 7, it ...

Defaulting on Chapter 13

Chapter 13 is called a wage earner's bankruptcy for a reason -- you need enough disposable income each month after ...

Can You File Chapter 7 When Bills Are Current?

Bankruptcy can help you get a fresh start financially by erasing, or discharging, some of your debts or giving you time ...

How Does Reaffirmation in Bankruptcy Work?

Bankruptcy is about fresh starts. Filing for Chapter 7 protection allows your bankruptcy trustee to liquidate property ...

Browse by category
Ready to Begin? GET STARTED