If you’re reading this blog post it means you are either at the end stages of your Chapter 13 bankruptcy or want to be done with your Chapter 13 bankruptcy. To provide as much helpful information as possible, we will describe the typical timeline for the end of a Chapter 13 bankruptcy. Understand that each case is different, and this timeline may vary from one case to another.

The answer to how long you have to be in bankruptcy depends on several factors. Most importantly, you must know what your “commitment period” is in bankruptcy. The commitment period is the time you are statutorily (by law) required to be in bankruptcy.

If you were above the Means Test when filing your Chapter 13 bankruptcy, you will have a required commitment period of 60 months, or five years. That means you are expected to make a monthly payment for 60 months. In that scenario, the only way you can get out of Chapter 13 bankruptcy in less than 60 months is to pay off everyone you owe in the bankruptcy in full. Let me better illustrate with an example.

Suppose you owed $100,000.00 of unsecured debts in the Chapter 13 bankruptcy and you were only going to pay back 1% of those debts (or $1,000.00) in your Chapter 13 bankruptcy. In that case, you can’t get out of the bankruptcy earlier than your commitment period by paying the $1,000.00 early. Instead, you could only finish the Chapter 13 bankruptcy earlier than 60 months if you paid back all $100,000.00 of the debt you owed within the bankruptcy.

If you are below the Means Test, the commitment period is 36 months. That does NOT necessarily mean you will be done in 36 months. Most bankruptcy attorneys work with you to keep your payments as affordable as possible. So although you may not be required to be in bankruptcy for 60 months, your case may last that long so your monthly payments were an amount you could afford. However, if you are below the Means Test you can get out as early as 36 months if you have paid back the amounts you are required to pay back. Can you get out earlier than 36 months? Yes, but only if you pay back 100% of the unsecured creditors who filed proof of claims in your case. (Similar to the example above.)

Yes, technically, you can. In rare circumstances, you can make a lump sum payment and finish your Chapter 13 bankruptcy early. If that were to happen, you should reach out to your Chapter 13 bankruptcy attorney so they can file any appropriate motions with the Court. Determining the amount needed to pay off the bankruptcy early is a long and complicated process that requires a lot of time to ensure all necessary local and federal laws are being followed closely. Therefore, to run the required numbers you should have specific information showing what lump sum amount of money you can pay to finish the bankruptcy early.

As you reach the end of your Chapter 13 bankruptcy, there are several important steps to be aware of.

You must continue making your Chapter 13 bankruptcy payment until the Chapter 13 Trustee’s office tells you to stop. Then, if you pay more than required, they will issue you a refund for the overpayment. However, you should not stop making payments because you believe you’ve paid the required amount.

As your case enters its final stages, the Chapter 13 Trustee will complete an audit of your case. This audit ensures the Trustee has paid out all necessary payments to creditors and all the required laws have been followed. This is an internal process; you will not receive something specifically from the Trustee letting you know your case has gone into its final audit.

If you have a mortgage payment being paid as a conduit payment (a fancy way of just saying the Trustee is paying it instead of you), then the Trustee will file a Motion with the Court asking them to agree that all of the necessary mortgage payments have been made and that you are current on your mortgage payment. This motion is served on your mortgage company as well. The Court will then enter an Order stating you are no longer considered past due on your mortgage payment as of the end of the Chapter 13 bankruptcy.

This Order is essential because you may see mortgage statements reflecting that you are past due on your mortgage. Many mortgage companies keep records showing what would be owed on your mortgage if you were dismissed from bankruptcy. That is only done for accounting purposes, and once the Judge enters an Order saying your mortgage is current, it’s current regardless of what the mortgage company’s statement shows.

The Trustee’s Motion to Deem the Mortgage Current does not mean your entire mortgage is wiped out or paid off, so you would need to continue to make payments on your mortgage going forward. More on that is below.

Once the audit is completed and the Trustee’s office can verify all necessary payments were paid and that all creditors were treated as they were required to be treated under the Chapter 13 Plan, the Trustee will file a document with the Court called the Notice of Completion of Plan. You will receive this information in the mail. In this document, the Chapter 13 Trustee will usually tell you that you no longer need to make Plan payments to the Chapter 13 Trustee’s office. At that point, you will begin making direct payments to any secured debts (mortgage, long-term car payments, etc.) that still exist after the bankruptcy.

After receiving the Notice of Completion of Plan, you are required to file a Motion for Entry of Discharge. This motion is typically done in conjunction with your bankruptcy attorney. The Trustee will usually send a copy of the Motion for Entry of Discharge to you in the mail as well as send a copy to your bankruptcy attorney.

Within that packet of information, there are two documents, in particular, that need to be filled out—the Debtor’s Disclosure of Information Regarding Domestic Support Obligations and the Motion for Entry of Discharge. So we will fill those two forms out with your pertinent information and then send them to you to be signed. We usually send them to you as a DocuSign form so you can electronically sign the documents, and we will then file them on your behalf.

Approximately 30 to 40 days after submitting your Motion for Entry of Discharge, you should receive your actual discharge paperwork. Again, that’s essential paperwork you will want to ensure you keep in a safe place.

When your discharge is entered, the unsecured, non-priority debts like credit cards, medical bills, personal loans, repossessions, eviction fees, etc. are wiped out. Therefore, you will no longer owe on those dischargeable debts.

The discharge is the entire reason you filed the bankruptcy. I always encourage my clients to hang on to their discharge paperwork (you’ll receive a copy in the mail) and keep it with other vital documents you rarely use (birth certificates, marriage licenses, etc.). You do this so if anyone in the bankruptcy pops back up and says you owe them money, you can send them a copy of the discharge paperwork and tell them to contact your bankruptcy lawyer.

About 45 days after you’ve received your discharge, you will receive a document called a Final Decree. It’s the document that officially closes your case. Once this document is received, you are no longer in bankruptcy.

By the time you reach this stage, you have hopefully begun to enjoy the reality that your debts have been wiped out, your credit score has significantly gone up, and you have some form of financial freedom. For that, congrats!