How Long Does the Chapter 13 Process Take in Arkansas?

Chapter 13 is one of the most complicated forms of bankruptcy, and many factors decide the duration of the repayment plan.

Chapter 13 is the most complicated and expensive version of bankruptcy. It can be utilized by an individual or sole proprietorship and is geared towards reorganizing all financial assets to effectively pay off debts and become viable again. This is usually done by avoiding foreclosure and rescheduling secured debts over a more extended period of time, which lowers the monthly payments. Another advantage is that co-signers and third parties who are liable to the debtor can be protected. Chapter 13 works like a consolidation loan where the debtor makes payments to a trustee who then distributes the payments to the creditors.

Duration Of The Bankruptcy

The nature of these payments, the size and scope of the reorganization plan, and the duration of the bankruptcy itself are all subject to many factors. As a general rule, if the debtor could qualify for Chapter 7 bankruptcy but chooses Chapter 13, the Chapter 13 repayment plan can be set for three years. If the debtor cannot be eligible for Chapter 7, the repayment plan will be set for five years.

Chapter 7 vs. Chapter 13

In broad terms, a Chapter 7 bankruptcy results in the liquidation of assets to pay back creditors. By contrast, Chapter 13 bankruptcies allow the debtor to keep their assets and use them to pay back their debts. This is done through a court-approved reorganization plan that attempts to trim the fat from the business. Chapter 13 requires a continuous income for the reorganization plan to be viable, and organizations with too high income will not qualify for Chapter 7.


So to qualify for Chapter 7, the debtor’s income must be below the median of their state. If this is the case, but the individual or company chooses Chapter 13 instead, the duration of Chapter 13 will be set for three years. This timeframe can also be extended to five years if the debtor needs extra time. If the debtor’s income is higher than the state median and their unsecured debt is below $419,275, the Chapter 13 timeframe will be set at five years.


If you are considering a Chapter 13 bankruptcy, get help from an expert. Call Natural State Law, PLLC at (501) 916-2878.