Fear Waddell, PC, I am frequently asked “what is the timeline for a typical
Chapter 13 bankruptcy?” There are a wide
variety of things that can happen in Chapter 13, but here is a summary
of the basic things to expect (and a few things that might not happen
all of the time):
- Before filing, the Chapter 13 client and attorney are required to collect
and review a large amount of financial data about the client. (FRBP 9011
requires that reasonable inquiry be made into the factual contentions
made in bankruptcy documents. Failure to do so can result in sanctions
against the debtor or the debtor’s attorney.)
- After all of the information is collected and analyzed, the bankruptcy
petition, schedules, statements and Chapter 13 Plan are prepared.
- The timeline for completing these tasks are really dependent on how long
it takes the debtor to compile the information and how long it takes the
attorney to prepare the necessary documents. This can vary widely from
debtor to debtor and from attorney to attorney.
Document Signing and Filing
After the petition, schedules, statements and Chapter 13 plan are prepared,
the debtor and attorney meet to go over these documents. Once the debtor
certifies that everything is accurate, the debtor signs all of the documents.
Shortly thereafter (usually the same day or the day after), the bankruptcy
case is filed with the bankruptcy court, sometimes referred to as the
“filing date” or “petition date.” At the time
of filing, the automatic stay goes into effect, which keeps creditors
from attempting to collect from the debtor.
Documents to Trustee.
Time: no later than approximately 21 days after filing.
Debtors are required to provide documents to the Chapter 13 Trustee. In
addition to the documents required by Section 521 (tax returns and paystubs),
the Chapter 13 Trustee will usually have a long list of documents that
are required. Usually, the Chapter 13 Trustee will send a letter with
the documents required to the attorney or the debtor. These documents
must usually be received by the Chapter 13 Trustee no later than 7 days
prior to the 341 meeting of creditors, but some trustees may have an earlier
Debtor Starts Making Plan Payments.
Time: Within 30 Days after filing (unless court orders otherwise).
The debtor must start making Chapter 13 plan payments within 30 days after
the case is filed (unless the court orders otherwise). Chapter 13 Trustees
usually require that payments be made by cashier’s check or wage
order, although many are now are allowing payments to be made by TFS Billpay
(www.tfsbillpay.com). In our district, the court has “ordered otherwise”
and Chapter 13 plan payments must be made by the 25th of the month following filing. And the best method for making payments
is to use
www.tfsbillpay.com. Debtors often ask, “do I have to start making payments before I
“go to court [meaning the 341 meeting)?” The answer is “most
of the time, yes,” because most of the time the deadline for making
payments is before the first meeting of creditors.
First 341 Meeting of Creditors.
Time: approx. 30-40 days after filing.
The 341 meeting of creditors is an opportunity for creditors to ask questions
of the debtor under oath. The Chapter 13 Trustee (or the trustee’s
representative) will ask some questions of the debtor and will investigate
whether the schedules are correct and whether the plan is feasible. The
bankruptcy rules require that the first Chapter 13 341 meeting be held
no earlier than 21 days after filing and no later than 50 days after filing.
The meeting may be continued to another date for further questioning,
if the trustee needs additional information.
Objections to the Plan.
Time: Within 7 days after first 341 meeting (approx. 40-50 days after filing),
The Chapter 13 Trustee and creditors have to object to the plan within
7 days after the first 341 meeting, unless the time to do so is extended.
File Debtor Education Certificate.
Time: Within approx. 75 days after filing. The rule requires that the debtor education certificate be filed within
45 days after the meeting of creditors, which is usually approximately
75 days after filing.
Time: Varies, but approximately 60-70 days after filing if no objection.
If no objection to the original Chapter 13 plan is filed, the plan is usually
confirmed within 30 days after the first meeting of creditors. If an objection
is filed, the time for confirmation varies wildly. Some objections involve
such complicated factual and legal issues that they take months or even
over a year to resolve. Other times, the debtor might propose a number
of plans, attempting to address issues raised by creditors or the trustee,
before a plan is confirmed.
Duration of Plan.
Usually between 36-60 months.
Except in unusual circumstances, a Chapter 13 bankruptcy plan lasts between
36-60 months. For below median debtors, the usual length is 36 months.
For above median debtors, the usual length is 60 months. And 60 months
is the maximum term that a plan can continue. During the plan term, debtors
make their payments to the Chapter 13 trustee, and communicate any significant
changes to the trustee.
Post-Confirmation Modified Plan(s).
Time: Any time after the initial plan has been confirmed.
There are any number of reasons why a plan might have to be modified: lost
job, car wrecked, illness, etc. If a plan modification is necessary, the
attorney must propose that to the court and ask the court to approve the
modification before it goes into effect. And there may be multiple modified
plans in a case if needed.
Completion of Plan Payments.
Time: Usually 37-61 months after filing.
Once the debtor has made all plan payments, the plan is considered to be
completed, and the trustee issues the Notice of Completed Plan Payments.
At this time it is necessary to certify certain facts to the court in
order to obtain the discharge.
Trustee’s Final Report.
Time: Varies, but usually within 4 months of completion of plan payments
(or 67 months after filing).
After all plan payments have been made, the Chapter 13 Trustee will submit
a final report to the court stating how all funds have been disbursed.
Interested parties have 33 days to object to this report. If no one does,
it will be approved.
Notice of Intent to Enter Discharge.
Once the Final Report has been approved and the proper certifications have
been made by the debtor, the court notifies all interested parties that
it intends to enter the discharge. Parties have 14 days to object to the
entry of a discharge.
Time: After all plan payments have been completed and TFR has been approved
(approx.. 66 months after filing).
The discharge is the legal decree that says creditors are no longer allowed
to attempt to collect on a particular debt. Debtors are required to certify
several facts before the discharge is entered.
Plan Treatment Follow-Through. Time: Varies.
A Chapter 13 Plan can do many things. For example, the plan can catch up
arrearages on a mortgage, strip of a junior mortgage where there is no
equity to support it, reamortize a car loan, etc. In each of these situations,
there may be a need to force the creditor to take some actions, such as
reconveying a deed of trust for a junior mortgage, returning a car title
to the debtor, or acknowledging that the plan brought a mortgage current.
Some attorneys do not provide these services to clients. At Fear Waddell,
we believe these services are essential to clients getting a fresh start,
so we discuss these options with clients and provide them mechanisms to
make sure that they get the benefit of the completed Chapter 13 Plan.
This occasionally delays entry of the final decree, but we believe that
it is in the client’s best interest to get all of the legal documentation
the debtor is entitled to after a Chapter 13 plan has completed.
Time: 14 days after discharge (or approx.. 67 months after filing) if no
plan treatment follow-through is needed.
After everything in a case has been completed, the final decree is entered.
The final decree says that the bankruptcy case is finished, the trustee
is discharged from his duties and all scheduled assets are abandoned to
the debtor (if not previously vested in the debtor).