One of the most common questions that a person filing a Chapter 13 in Ohio asks is how long will this payment plan last? The answer is not as simple as you may think. You should discuss this with your bankruptcy attorney. The first determining factor for your payment plan is whether your income is above or below the median income line from the Means Test. If your income is above the median income line, you have to be in your plan for 60 months or 5 years unless you are paying back 100% to your unsecured creditors. If your income is below the median income line, you have to be in your plan for at least 36 months or 3 years but no more than the maximum 5 years unless you are paying back 100% to your unsecured creditors.
You are already asking yourself, what is the median income? The median income is an income figure that was established in the 2005 reforms to the Bankruptcy Code. The median income figures are updated at least annually and published by the United States Trustee’s Office. A skilled bankruptcy attorney, such as those here at Godbey & Associates, is very familiar with the income figures and can help guide you to determine whether your family income is above or below this median income figure.
Now that we have determined how long your plan may be, the next question is when do I start paying? A big misconception is that payments do not begin until your court date; however, according to the Bankruptcy Code, your first Chapter 13 payment is due thirty days from the date you file your bankruptcy petition and Chapter 13 plan. It is very important to get that first payment in to get your Chapter 13 plan funding, which sets you up for long-term success.
As you can see, Chapter 13 Bankruptcy is a very complex subject where a simple question like the length of a payment plan reveals more questions that need answered. It is very important you find an attorney that specializes in bankruptcy law to help guide you through this complex process.