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
Maximum Time for a Chapter 13 Bankruptcy
 

References

Related articles

Bankruptcy & Child Support Arrears in New Jersey

Bankruptcy can help you get a fresh start financially by eliminating many of your debts or giving you a chance to catch up on debt payments. Filing bankruptcy in New Jersey does not eliminate child support arrearages, but it may allow you to stop making payments on your arrearages for a while.

What Happens After Meeting of Creditors in Chapter 13?

The meeting of the creditors, referred to as the 341 meeting because of the Bankruptcy Code Section that specifies the meeting, is an informal meeting held shortly after you file for bankruptcy. The meeting of the creditors is held in every bankruptcy case, whether you file for Chapter 7 or Chapter 13 bankruptcy. In a Chapter 13 bankruptcy, what happens during and after the meeting of creditors can determine whether your Chapter 13 repayment plan will be accepted by the bankruptcy court.

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

Defaulting on Chapter 13

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

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 ...

Can I Go Bankrupt & Keep My House if It's in Foreclosure?

If you've fallen behind on your mortgage payments, catching up may prove challenging. Not only do mortgage companies ...

What Happens If I Don't Pay My Chapter 7 Overages?

Under Chapter 7 bankruptcy, your assets are valued by a court-appointed trustee and sold to pay your creditors. You are ...

Browse by category
Ready to Begin? GET STARTED