When Does a Payment Plan Start on Chapter 13?

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Having the option of filing for Chapter 13 bankruptcy instead of Chapter 7 can be a real blessing if you're worried about retaining certain assets, such as your home or car. A Chapter 13 plan allows you to repay your debts over three to five years in regular installments based on your disposable income. In exchange, the trustee does not liquidate your property to satisfy your debts. But you have to make your payments to the trustee -- and you must do so on time.

The First Payment

Under federal law, your first payment is due 30 days after you file your Chapter 13 bankruptcy petition and proposed repayment plan with the court. Your meeting of creditors, a regular part of all bankruptcy proceedings where the trustee reviews your case, is typically scheduled shortly after this time. You should have made your first payment before you appear for this meeting.

Payments on Secured Loans

If you have a mortgage or a car payment, these secured debts may or may not be included in your Chapter 13 repayment plan. It depends on the rules in your state. If they're paid outside your plan, these accounts must typically also be current by the time you attend your meeting of creditors. If you make your Chapter 13 payments to your trustee but neglect these other loans, the creditors can ask the court for a relief from stay and proceed with foreclosure or repossession regardless of your bankruptcy.


About the Author

Beverly Bird is a practicing paralegal who has been writing professionally on legal subjects for over 30 years. She specializes in family law and estate law and has mediated family custody issues.

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