The answer to this question would be, yes and no. Under Section 1322 of the Bankruptcy Code, depending upon the disposable income of an individual, the Plan length would be not less than 3 years nor more than 5 years.
Fortunately, due to the COVID-19 Pandemic, Congress has seen fit to make adjustments to the length of the Plan in certain cases. This falls under the Provisions of The Cares Act Section 1113(b)(1)(C) and 11 U.S.C. Section 1329(d)(1). If you have a Chapter 13 Plan that was confirmed (approved) prior to March 27, 2021 and you have experienced COVID-19 related hardships you may qualify to extend the Plan to as long as 84 months ( 7 years).
This would be especially helpful to Chapter 13 filers that suffered a loss of income during the past year of the Pandemic and resulting in their not being able to fund their Chapter 13 Plan. By extending the length of the Plan, the hope would be that the payment might be lowered to reflect a lesser monthly income or the added months would simply allow for the making up of missed payments and defaults that all occurred because of COVID-19 hardships. This might allow the individual to avoid losing their automobile or house because of the Plan being behind in payments to these secured creditors.
This provision could save some Chapter 13 Plans from dismissal, however, it is important to look at these situations on a case by case basis as it is sometimes very difficult for someone to remain in Chapter 13 to completion in a 5 year Plan, much less to try and extend the Plan even further to 7 years.
This is definitely a case where all involved have good intentions but sometimes the remedy is worse than the problem. In some cases, it might make more sense to allow for the dismissal of the present case and re-file a new Chapter 13.
If you have been impacted by the Pandemic, be sure and talk with your Bankruptcy Lawyer about this new Cares Act Provision to see if it would benefit your financial situation.
All the best!
David E. Phillips
Attorney at Law