Chapter 13 Timeline
The outline below provides a detailed timeline of events and deadlines that you can expect to encounter in a typical Chapter 13 bankruptcy case. Like everything else in bankruptcy, these time frames and events are set forth in the U.S. Bankruptcy Code and the Federal Rules of Bankruptcy Procedure. Under Chapter 13, the debtor has the exclusive right to propose a plan pursuant to which it agrees to repay its creditors. Generally, Chapter 13 permits the debtor to propose a repayment plan to creditors over 60 months, or five years. Plan payments are generally made from the debtor’s income, as opposed to from the liquidation of assets. Payments are distributed by a Chapter 13 trustee, who administers the case.
The timeline below outlines the numerous procedural steps that debtors must go through in order to get their Chapter 13 bankruptcy payment plan reviewed by the trustee and, eventually, approved by the Court.
Credit Counseling Class
An individual may not be a debtor under Chapter 13 (or any other chapter) unless the individual received credit counseling from an approved credit counseling agency in an individual or a group briefing within 180 days before filing. 11 U.S.C. §§ 109(h). The individual debtor must file a certificate of credit counseling briefing, a statement of compliance with the credit counseling briefing requirement, and a debt management plan, if any, with the petition.
File Bankruptcy Petition
A Chapter 13 case may only be commenced by the debtor filing a voluntary bankruptcy petition. Filing the petition is what gets everything started and triggers the automatic stay to stop all collection actions.
Chapter 13 Trustee Appointed
As soon as the Chapter 13 bankruptcy petition is filed, a Chapter 13 trustee will be appointed by the Court. The Chapter 13 trustee is appointed automatically by the e-filing system. In Maryland, there are only 2-3 Chapter 13 trustee that can be appointed.
File Schedules and Other Documents
A Chapter 13 debtor must file most of the same documents as individual debtors filing under another chapter of the Bankruptcy Code. Debtors must file the schedules and statement of financial affairs within 14 days of the bankruptcy filing.
File Chapter 13 Plan
The debtor must file the plan within 14 days of the petition date or 14 days after the case is converted from another chapter. The court may extend such period for cause. No other party may file a plan. The failure to file a plan is grounds for dismissal. requires that the official form for a Chapter 13 plan be used (Official Form B113), unless a local form has been adopted.
File Exemptions
Individual debtors may set aside certain property as exempt from creditors’ claims. The debtor must file the schedule of claimed exemptions either with the petition or within 14 days after filing the petition, unless the debtor obtains an extension upon cause and on notice to the trustee.
Provide Documents to Trustee
Individual debtors must provide the Chapter 13 trustee with their most recent federal income tax return no later than seven days before the Section 341 meeting. They will also be required to provide pay stubs (or if self-employed other evidence of income).
Meeting of Creditors
The Chapter 13 trustee is required to schedule the meeting of creditors within 21 to 50 days after the petition date. Fed. R. Bankr. P. 2003(a). Individual debtors (and their spouses if jointly filed) must personally attend the meeting of creditors. 11 U.S.C. §§ 341(a) The debtor must bring certain records to the meeting, such as financial information documents (e.g., bank and income statements) and personal identification. These obligations are set forth in the Federal Bankruptcy Rules – Fed. R. Bankr. P. 4002(b);
Make Monthly Plan Payments
Within 30 days after filing the bankruptcy case, even if the plan has not yet been approved by the court, the debtor must start making plan payments to the trustee. The debtor is also required to make adequate protection payments to holders of allowed claims secured by personal property and payments to personal property lessors prior to confirmation. Plan payments made by the debtor are made to and retained by the trustee until confirmation or denial of confirmation of the plan. If the plan is confirmed, the trustee is required to distribute any such payments in accordance with the plan as soon as practicable.
Automatic Dismissal
If the Chapter 13 debtor fails to file the required documents (schedules, statement of financial affairs, etc.) within 45 days of the petition date, the Chapter 13 case will be automatically dismissed on the 46th day after the petition date. The procedures for automatic dismissal are determined locally. The trustee may file a motion (prior to the expiration of the 45-day deadline) requesting that the court decline to dismiss the Chapter 13 case if (1) the debtor has attempted to file all information and (2) the best interests of the estate would be served by the administration of the estate.
Plan Modifications
The debtor may modify the Chapter 13 plan at any time before confirmation. Debtors often modify Chapter 13 plans to address objections. Creditors must be provided 21 days’ written notice of the time to accept or reject a proposed modification of a plan. Often the plan will be modified based on feedback from the trustee at the meeting of creditors.
Confirmation Hearing
The confirmation hearing must be held between 20 and 45 days after the Section 341 meeting of creditors but could be held earlier if in the best interests of creditors and there is no objection. Creditors must receive 28 days’ notice of the confirmation hearing. A party in interest may object to confirmation.
Discharge Objections
The Chapter 13 trustee, a creditor, or the U.S. Trustee may object to a discharge on any of the grounds enumerated in Section 1328. Such objection must be filed within 60 days after the first date set for the meeting of creditors. A party in interest may obtain an extension of time to file an objection upon a motion filed before the deadline and after notice and a hearing.
Comply With Plan
Section 1322(a) of the Bankruptcy Code sets forth the provisions that must be included in every Chapter 13 plan. Section 1322(b) provides a nonexclusive list of optional provisions that may be included in a Chapter 13 plan. The required terms of the Chapter 13 repayment plan must provide for the debtor to repay its debts for up to three or five years (depending on whether the debtor’s current monthly income is below, at, or above the applicable state median income).