What Is A Chapter 13 Bankruptcy Plan?

In a Chapter 13 bankruptcy, part of the filing is called the “plan,” which outlines the debt repayment schedule over a three to five year time period. The court will appoint a Chapter 13 trustee, who acts more as a disbursing agent, not a liquidating trustee. The Chapter 13 trustee collects payments from the debtor and in turn disburses payments to creditors. The debtor retains possession of all their property, be it exempt or non-exempt. At the conclusion of payments made under the payment plan, the debtor usually receives a discharge of debts, even if the payments have totaled less than 100% of the debt, with some exceptions. In a Chapter 13 bankruptcy plan, the first payment is due 30 days from the date the plan was filed.

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