When you file for Chapter 13 bankruptcy, you negotiate a repayment plan with your creditors and agree to pay them all or part of what you owe them over time. How much time can vary. If you’re curious about how long this obligation would last for you, it’s a good idea to speak to a Bergen County Chapter 13 bankruptcy lawyer.
How Long Should a Repayment Plan Last?
A repayment plan negotiated through Chapter 13 bankruptcy will last for three or five years. If you negotiate a five-year repayment plan, you cannot ask for a longer time to pay off your debts. You also cannot end the plan early because you think you’ve paid off enough debt. You must make your payments on time or your bankruptcy case could be dismissed. If you are genuinely unable to continue paying, you must go to court and ask for a hardship discharge. These are not easy to get.
Instead of a five-year plan, you could end up with a three-year plan. In some cases, you can extend this into a five-year repayment plan and end up with lower monthly payments. There can be drawbacks to extending your commitment and putting off the discharge of your bankruptcy.
What Factors Affect How Long a Repayment Plan Lasts?
The primary factor affecting how long your obligation lasts is your income. People with income below the state median generally end up with a three-year plan. Filers with income above the median have a five-year plan. If you have a five-year repayment plan, it’s assumed that you have the capability to repay more of your debt.
Do I Pay Off All of My Debt With My Repayment Plan?
This can depend on your level of debt, your income, and the type of debt you have. Some filers do end up paying off all of their debt through a repayment plan. Others end up paying a portion of their debt and then their plan ends without them owing anything else.
How Long Will Chapter 13 Bankruptcy Stay On My Record?
A Chapter 13 bankruptcy can affect your credit for a long time. It usually takes seven years to fully recover from filing. However, getting the chance to get a fresh financial start and settle debts can be a better choice than continuing to drown in past-due bills. Our experienced attorneys can help you take a look at all of your options and we will help you file for Chapter 13 bankruptcy if that seems like your best path forward.
Talk to a Bankruptcy Attorney
Filing for bankruptcy and committing to a years-long repayment plan is a big commitment. So first make an appointment with our attorneys and make sure that you have all of the information that you need. Contact the Law Office of Boyd & Squitieri to schedule your consultation.
