What is Chapter 13 Bankruptcy?

Chapter 13 is a valuable tool that lets you catch up overdue mortgage or car payments, taxes and domestic support obligations. It also applies where you have the ability to repay some or all of your debts over time.

To qualify for Chapter 13, you must have both of the following:

  • Less than $419,275 in unsecured debt (such as credit cards and doctor's bills)

  • Less than $1,257,850 in secured debt (such as mortgages and car loans)

Under Chapter 13, you keep all of your property, both exempt and non-exempt, as long as you resume making your regular payments on secured debt and keep current under the repayment plan that you propose.  A repayment plan typically lasts for anywhere from three to five years. After completing the repayment plan, your remaining unpaid unsecured debts are discharged with the exception of certain types of debts such as child support, alimony, some taxes, student loans, criminal restitution, and debts for death or personal injury caused by operating vehicles while intoxicated with alcohol or drugs.

Why File for Chapter 13?

You may want to file for Chapter 13 bankruptcy for 1 or more of these reasons:

1.  Your income is over median family income for your household size.  Median income is approximately:


$50,000 for a household of 1
$60,000 for a household of 2
$67,000 for a household of 3
$79,000 for a household of 4
$88,000 for a household of 5.  

2.  You have non-exempt assets to protect that a Chapter 7 Trustee will otherwise take and sell.  Exemption law is complex but our exemption expertise will be put to work to protect your assets.

3.  You have regular income that enables you to make regular monthly plan payments.

4.  You want to repay non-dischargeable back taxes to the U. S. Treasury Internal Revenue Service (IRS) without penalties and interest.

5.  You have a pending personal injury claim that you want to retain control over.

6.  You owe joint debts or property settlement debts to or with a former spouse from a divorce that would not be dischargeable in Chapter 7 but are dischargeable through the Chapter 13 super-discharge.

7.  You want to save your home from foreclosure or avoid a vehicle repossession and need bankruptcy protection to catch up arrears.

8.  You can easily back out of a Chapter 13 case by dismissing it unlike in Chapter 7.

9.  You have a wholly unsecured second mortgage that you want stripped off which you can't do in Chapter 7.

10.  You need the Chapter 13 super-discharge to discharging fines or penalties to the government or debts arising from willful or malicious injury.

See Chapter 13 FAQs

Robert clearly identified for me the best options to move forward in my present financial situation. Dealing with past behavior that generated significant debt is not an easy topic to revisit. I would highly recommend him for anyone seeking bankruptcy legal advice.
— James W.

Chapter 13 FAQs

Frequently Asked Questions Regarding Chapter 13 Bankruptcy:

When is my first payment due?

30 days from the date your case filed.

Can I make my plan payments automatically online?

Yes, through tfsbillpay.com

Will the Chapter 13 Trustee also take my tax refunds?


Will I lose property in a Chapter 13 case?

 No.  The Chapter 13 trustee pays creditors out of your plan payments and not the liquidation of your property.

Will I have to appear in Court?

You will have to appear for a “meeting of creditors” presided over by the Chapter 13 Trustee.  However, we almost invariably are able to get our clients out of having to attend the second “confirmation hearing” presided over by the bankruptcy judge in bankruptcy court.

Will I be represented in Court and at the meeting of creditors?


 How long will I be in Chapter 13?

The length of your Chapter 13 plan depends on your income level along with other factors.  If your income is less than median monthly income for your household size, then you can choose a 36 month plan.  Your plan must be 60 months if your income exceeds the median monthly income for your household size.

Do I have to include my mortgage and car payments in my Chapter 13 plan?

No.  Mortgage and car payments can be paid outside of your Chapter 13 plan provided you are current on the payments.

How is Chapter 13 different from a debt consolidation or settlement services?

Unlike debt consolidation or settlement services, Chapter 13 enables you to stop all collection activity and lawsuits against you and discharges most debts you are not able to repay.

 Whether you already know which Chapter is right for you, or you need help choosing between Chapter 7 and Chapter 13, schedule a free consultation today.