How long does a Chapter 13 case last when you hire a Symerton bankruptcy lawyer? Chapter 13 bankruptcy cases last anywhere from 3 to 5 years, depending on the nature of the debt. Those cases take significantly longer because the debtor is in a repayment plan over a three- to five-year period. The amount of the repayment plan is dependent upon the income and expenses of the debtor as well as the assets and liabilities of the debtor, and of course the amount to be paid back through the Chapter 13 plan. First mortgage arrears are paid back in full, recent tax debt is paid back in full, child support debt is paid back in full, and the debt owed to the Chapter 13 bankruptcy lawyer is obviously paid in full. Other creditors such as credit cards, medical bills, personal loans, utility bills, those can often be paid back at less than 100 percent on the dollar. The amount that is paid back is contingent upon the income and expenses of the debtor as well as the assets.
There is something called a “Chapter 7 liquidation analysis.” What this analysis does is it looks at what would creditors receive if the debtor filed a Chapter 7 bankruptcy and liquidated his property. The rule is the debtor must pay back in a Chapter 13 bankruptcy case at least what creditors would get if the debtor did a Chapter 7 liquidation case. Thus, the trustee in Chapter 13 is going to make sure that the debtor is paying back at least as much as creditors would receive in a Chapter 7 liquidation. That is why it’s often difficult to give an estimate as to what percentage the debtor is going to pay back to unsecured creditors. Many people talk about 10¢ on the dollar. In reality, most people who file Chapter 13 bankruptcy, repay back approximately 25 to 45 percent on the dollar to unsecured creditors. However, many creditors do not file what’s called a “proof of claim” and are not part of the payout. Provided the debtor completes the Chapter 13 plan payments as scheduled, unsecured creditors who do not file a claim are eliminated. They can never seek to collect from the debtor again. So it’s a little bit unusual in that creditors might be paid back anywhere from 10¢ to 45¢ on the dollar; however, other creditors are paid nothing. So you really need to take an average of what people are paid back, analyzing that in accordance with what creditors didn’t file claims, to get a real good indication of what creditors are paid percentage-wise in a Chapter 13.
Once again, the Chapter 13 bankruptcy case will last anywhere from 3 to 5 years. It could be paid off quicker than that if the debtor is paying 100 percent to the creditors and makes a lump sum payment to the Chapter 13 trustee. For more information on how to claim bankruptcy, check with your local bankruptcy bar to find an appropriate attorney.