If you file for Chapter 13 bankruptcy, part of the process is coming up with a bankruptcy plan, a restructured plan that would allow you to pay off some of your debts. How long will it take you repay creditors through a Chapter 13 plan? This repayment plan (or "commitment period") usually takes three to five years, but ultimately the length of your specific bankruptcy process will rest in how much you net in monthly income, and in what amount of time you need to pay off debts. But no plan is allowed to go longer than five years. You do have the option of paying off creditors early in some scenarios.

The first issue is your monthly income. In order to qualify for Chapter 13 bankruptcy, you have to demonstrate that you earn enough to actually follow through on a modified payment plan. If you are eligible, your income further affects how long the plan will take. If your monthly earnings are less than your state's median family income, then your commitment period will last three years; if you make more each month than the median monthly income, then your Chapter 13 plan will last five years.

Then there may be reasons why you may want a longer repayment plan. The primary reason would be how long you need to pay off certain debts. The main debts in Chapter 13 are often the house and the car(s). Chances are, you won't get caught up on your home and car payments in three years. You are likely to need an extension to a five-year plan. The need to pay off your administrative costs (the bankruptcy trustee and your lawyer) is another reason you may need a longer plan.

Finally, to meet the "best interests of the creditor", you may need the longer plan. Under this "best interests" standard, your unsecured creditors are owed at least as much as they would have gotten had you filed for Chapter 7 bankruptcy instead. In some cases, meeting this standard means going with the longer plan.

Can the length of my Chapter 13 plan be modified?

Yes, if certain changes occur. If a debtor lets go of the house or car because payments are too much, then the bankruptcy plan could be decreased, assuming the bankruptcy court agrees to the modification of your bankruptcy plan. If you experience a significant drop in income, then you might ask the bankruptcy court to accept a five-year plan, instead of the original shorter one.

If you go through a stint of monetary trouble, such as getting laid off, then you can probably get a 90-day break from making payments, but the five-year timer will still be going. The length of your overall plan won't change.

Talk to a bankruptcy attorney today to start learning more about what it takes to get out of debt through Chapter 13 bankruptcy!