The final step of the Chapter 13 bankruptcy process is always the repayment plan. Essentially, this plan has you repay your debts at a manageable rate over time, all while allowing you to keep your property in your possession. So while it may be a lengthy process to endure, its payout may be pivotal for stabilizing your financial footing in the future. Continue reading to learn the factors that may determine the length of your repayment plan and how an experienced Louisville, Kentucky Chapter 13 bankruptcy lawyer at Schwartz Bankruptcy Law Center can help you propose a sustainable payment schedule.

What will the approximate length of my repayment plan be?

Approximately, the length of your Chapter 13 repayment plan may be anywhere between three to five years. Importantly, five years is the maximum length of any repayment plan, without exception.

With that being said, as the debtor of a Chapter 13 bankruptcy case, you may maintain control over how long your repayment plan will take to complete by filing an initial proposal with the Kentucky bankruptcy court. From here, it may the court anywhere between two months to one year to confirm your proposed schedule. Then, you may have up to 30 days before your first repayment is due.

What factors determine the length of my Chapter 13 repayment plan?

Generally speaking, the length of your Chapter 13 repayment plan may depend on your yearly income, along with the type and amount of debts you must pay off. For example, your plan may be completed in closer to three years if you earn less than the state median income, while it may take closer to five years if you earn more. With that being said, as of 2024, the median income in the state of Kentucky reads as follows:

  • For a single earner: the median income is $57,509.
  • For a family of two: the median income is $69,905.
  • For a family of three: the median income is $83,622.
  • For a family of four: the median income is $102,067.
  • For a family of five or more: the median income is $102,067 plus $9,900 for each individual in excess of four.

In addition, your plan may be completed in closer to three years if you primarily have priority debts and secured debts that must be paid in full. On the other hand, though, it may take closer to five years if you have more unsecured debts that do not necessarily need to be paid in full by the end of your Chapter 13 bankruptcy case. Specific examples of each debt type read as follows:

  • Types of priority debts:
    • Your past-due taxes.
    • Your past-due child support and spousal support obligations.
    • Your attorney’s fees and court costs.
  • Types of secured debts:
    • Your past-due mortgage payments.
    • Your past-due car loan payments.
  • Types of unsecured debts:
    • Your credit card bills.
    • Your medical bills.
    • Your outstanding student loan balance.
    • Your outstanding personal loan balance.

In conclusion, you must not second-guess your decision to retain the services of a skilled Louisville, Kentucky consumer bankruptcy lawyer. This is because we can guarantee someone at Schwartz Bankruptcy Law Center can guide you through every step.