How Long Does Chapter 13 take in New York City?
When you file a Chapter 13 bankruptcy petition in New York City you will propose a repayment plan that fully repays your secured creditors but gives your unsecured creditors only pennies on the dollar. Exactly how long your Chapter 13 repayment plan will last depends upon your monthly income and total debt, but almost all Chapter 13 repayment plans in New York City are completed in 3-5 years.
In order to qualify for Chapter 13 bankruptcy in New York City you must be making a regular income so you can meet your plan payments. Income is not only wages or commissions from a job or self-employment, but could also be social security or other government benefits, alimony, investments or rental income as well. Not everyone filing Chapter 13 has a regular job so to speak, and in fact the loss of a job can often trigger the need for bankruptcy in the first place. If spouses are filing jointly only one spouse needs to be earning an income, and a filing spouse with no income may even use the monthly income of a non-filing spouse, sibling or other family member to satisfy their Chapter 13 plan payments. Regardless of how you are receiving your monthly income, the length of your plan is determined by comparing your monthly income to the median family income in New York City.
In New York the median monthly income, as of May 15, 2015, for a family of two is $61,728 or $89,586 for a family of four. If you are earning less than the median family income your plan will be closer to 3 years, and if you earn more than the median it could be the maximum five years. Many of our clients that qualify for a 3 year plan will still opt for a 5 year plan since this may still be the best way to address mortgage arrears or overdue car payments. A longer plan period may be the only way to affordably address the significant debt that lead to a default on your secured property, and in order for it to be confirmed it must appear to be reasonable to the Bankruptcy Court.
To make your Chapter 13 plan a success you must make every plan payment as scheduled, but 3-5 years is a long time, and you never know what the future may bring. If you have trouble making your plan payments because of a short term set back like temporary unemployment the court may give you a respite from your plan payments for up to 90 days so you may get back on track. Unlike Chapter 7, Chapter 13 will also allow filers to pay administrative and attorney fees through the plan which allows many people to file much sooner.
Making a regular payment to the bankruptcy trustee for 3-5 years in exchange for keeping your secured property and eliminating your unsecured debt is a great deal for most New Yorkers. It gets better when you realize you will never hear from your creditors again and that you can pay for your lawyer through the Chapter 13 plan as well. Of course there are some consequences to any bankruptcy, and bankruptcy is not for everyone in debt. But if you are truly struggling to make ends meet consult with an attorney. Most clients are pleasantly surprised to hear how fast a Chapter 13 bankruptcy can help. If you live in New York City contact the Law Offices of William Waldner online or at 212.244.2882 to arrange a free consultation today. We primarily practice bankruptcy law and have a greater than 99% success rate for Chapter 7 Bankruptcy Cases filed as of September 11, 2015.
**** DISCLAIMER: This article is intended for educational purposes only. By reading no attorney-client relationship has been created. Prior results do not guarantee a similar result for future clients.