FAQs
How long does the process take?
The repayment plan in Chapter 13 typically lasts three to five years. There are options to convert the case to a chapter 7 at any time during the chapter 13 plan. Also, you can dismiss it if your circumstances change. Other options are to pay it off sooner, or to request a hardship discharge if your circumstances change for the worse during the plan term.
Can I keep my property if I file?
One of the key distinctions between chapter 13 and chapter 7 is that in Chapter 13 you are not required to turn over or liquidate any asset. In exchange for keeping property that might otherwise be nonexempt and liquidated in a Chapter 7 case, you are required to repay an amount equivalent to the nonexempt asset(s) in your Chapter 13. So yes, you can keep your property even if it is nonexempt.
Regarding property that is secured by a loan, like an automobile or home, in which you have defaulted on payments, yes, you can keep it free from foreclosure or repossession in chapter 13. One of the main purposes of Chapter 13 is to allow debtors to keep property secured by loans they have defaulted on, by proposing a repayment plan.
How often can I file for bankruptcy under this chapter?
It is possible to file multiple chapters without waiting between. However, if you completed and got a discharge in a prior chapter 13, you will not be eligible for a discharge unless the second case is filed more than two years from the date of the first discharge. The benefit to filing a chapter 13, even if you are not eligible for a discharge of any portion of your debts..is to get the protection of the Automatic Stay (prevents collection activities including foreclosure, lawsuits, repossession, harassment, etc), and to set up an extended payment plan.
If you want to file chapter 13 and be eligible to discharge any portion of your debts, you must wait two years from the date of your prior chapter 13 discharge to file your second case.
If you have a previous chapter 7 discharge, you can file chapter 13 four years later.
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