Chapter 13 bankruptcy usually lasts from 3 to 5 years. How long it lasts depends on your income and the percentage of debt you are paying back.

What Determines How Long Chapter 13 Bankruptcy Will Last?

Chapter 13 bankruptcy is court-supervised debt reorganization. You make a monthly payment each month to the Chapter 13 trustee. You set out what debt you want to pay back in the plan. The law determines what debt you must pay back. You may be able to decide how long the Chapter 13 bankruptcy lasts when the plan is figured. How long the Chapter 13 bankruptcy lasts generally depends on:

  • Your income
  • The type and amount of debt you have
  • Your budget
  • Whether you have property you can’t exempt

Initially, how long the length of the plan is determined by income. Your income for the last 6 months is considered. Using that income, a determination of whether you are over or under median (which is basically average) for your area and household size. If you are under median, the plan lasts a minimum of 36 months. If you need a lower payment, you may want a longer plan to keep the payment down. If you are over median, the plan may be required to last 60 months unless your plan commits to pay all of the debt back with interest.

Can I Pay the Plan off Early?

If you can show that the funds used for early payoff come from an exempt source, such as a 401k, or family help, you may be able to pay the plan off early. In some cases, you may be required to pay off all of the debt in order to complete the plan early.