At Fear Waddell, PC, I am frequently asked: “what is the timeline for a typical Chapter 13 bankruptcy?” or "how long is chapter 13 bankruptcy?" In general, Chapter 13 bankruptcies can take between 36-60 months. This timeline can vary but it typically takes between 3 and 5 years to complete a Chapter 13 bankruptcy case. 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 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 is 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
Time: Same Day
- 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 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 trustee will usually have a long list of documents that are required.
- Usually, the trustee will send a letter with the documents required to the attorney or the debtor.
- These documents must usually be received by the trustee no later than 7 days prior to the 341 meetings of creditors, but some trustees may have an earlier requirement.
Debtor Starts Making Payments
Time: Within 30 Days after filing (unless the 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).
- 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
- In our district, the court has “ordered otherwise” and 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 meetings)?” 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 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 meeting may be continued to another date for further questioning if the trustee needs additional information.
The bankruptcy rules require that the first Chapter 13 341 meetings be held no earlier than 21 days after filing and no later than 50 days after filing.
Objections to the Plan
Time: Within 7 days after the first 341 meetings (approx. 40-50 days after filing), unless extended
- The trustee and creditors have to object to the plan within 7 days after the first 341 meetings 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 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 a 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.
- 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 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
Time: 14 days to object if needed
- 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 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
- A Chapter 13 Plan can do many things, such as:
- Catch up arrearages on a mortgage
- Strip 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
- 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 mechanisms to make sure that they get the benefit of the completed Chapter 13 Plan. This occasionally delays the 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.
How Long After Discharge is a Bankruptcy Case Closed?
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).
- Additional Reading: Timeline for a Chapter 7 Bankruptcy
- Additional Reading: How to Rebuild Credit after Chapter 7 Bankruptcy
- Additional Reading: Can I File Bankruptcy on Payday Loans
Need help with a Chapter 13 bankruptcy case? Contact Fear Waddell, PC today!