How Long Does a Chapter 13 Repayment Plan Last?

Most Chapter 13 plans must be three or five years long, with a few exceptions. The payment period is lengthy because Chapter 13 bankruptcy allows debtors to reorganize their debts, catch up on missed mortgage or car loan payments, and pay off other obligations through a repayment plan over time.

How long a repayment plan will be depends primarily on your income. While a plan can be shorter than three years if it fully repays required debts, it can never exceed five years.

Calculating the Chapter 13 Repayment Plan Length

As part of your bankruptcy paperwork, you must complete Form 122C – Chapter 13 Statement of Current Monthly Income and Calculation of Commitment Period. On Form 122C, you state your average monthly income for the six months before filing your case, double it, and compare it against the yearly median income in your state for the same size household.

You can propose a three-year repayment plan if your income falls below the state median. But if your income is above the median, you typically must be in a five-year plan. The Chapter 13 payment calculator provides general estimates of the monthly plan payment.

Using Chapter 7 Qualifications to Determine Plan Length

If you've considered filing for Chapter 7 and have already qualified under the Chapter 7 means test, there’s an easy way to determine the length of a Chapter 13 plan. If you qualified for Chapter 7 bankruptcy based on your gross income alone (without deducting expenses), your Chapter 13 plan length would be three years. If you must deduct expenses to pass the Chapter 7 means test, it's likely your repayment plan commitment period will be five years.

If you’re not sure about the differences between the two chapters, start by learning how to choose between Chapters 7 and 13.

Selecting Five Years Instead of Three

If you are a below-median income debtor who qualifies for a three-year repayment period, chances are you filed for Chapter 13 bankruptcy to catch up on a house or car payment so you don't lose the property in Chapter 7 bankruptcy. In addition to using Chapter 13 to remedy missed mortgage payments, some filers use it to force creditors holding priority debts they must pay back in full to allow them to make payments over time.

Even if you qualify for a three-year plan, most courts will let you use a five-year plan if you don't earn enough to meet the monthly payments. Proposing a five-year plan can help you stretch your payments over a more extended period and reduce your monthly plan payment amount.

For instance, suppose a debtor must pay $30,000 in support arrears in full through the plan. The monthly payment would be $833 over three years but only $500 over five years, plus the trustee's fees. Find out which obligations you’ll pay back in your plan and which debts get canceled in a Chapter 13 case.

More Chapter 13 Repayment Plan Length Options

While most repayment plans must last at least three or five years, you can propose another length if it fully pays all your unsecured debts, such as credit cards and medical bills. This plan is commonly known as a “100% plan” because you pay everything you owe except for long-term debts, such as mortgages.