Chapter 13 Bankruptcy FAQ

Questions:

• What is Chapter 13 bankruptcy?
• How much of my debt will I have to repay if I file for Chapter 13 bankruptcy?
• How long will my repayment plan last if I decide to file for bankruptcy under Chapter 13?
• We're facing foreclosure. If we file for Chapter 13 bankruptcy, can we keep our home?
• My only income is from retirement benefits. Can I use those to fund a Chapter 13 repayment plan?
• Along with other debt, I owe back taxes to the IRS. Can Chapter 13 bankruptcy help?

Answer:

How long will my repayment plan last if I decide to file for bankruptcy under Chapter 13?

The length of your repayment plan depends on your income level. If your monthly income exceeds the median monthly income for a household of your size in your state, your plan must last five years -- unless you can propose a plan that pays 100% of your unsecured debt in a shorter period of time. If your income is less than the median monthly income for your state, you can propose a three-year plan, even if your unsecured creditors cannot be fully repaid during that time. To learn more about what your repayment plan must include, see Nolo's article Your Obligations Under a Chapter 13 Bankruptcy Plan.