Chapter 13 bankruptcy
Chapter 13: catch up and keep what you have
Chapter 13 is a repayment plan. You make one monthly payment to a trustee for three to five years, sized to what you can afford, and the trustee passes it on to your creditors. In return you keep your house and car, and the collectors, the garnishment and the foreclosure sale stay on hold while you pay.
It fits people with steady income who are behind on a mortgage or car loan, who earn too much for Chapter 7, or who own property they can't protect there. When the plan ends, much of the unsecured debt that is left can be erased.
It usually fits when
You are behind on a mortgage and want to keep the house
You earn too much for Chapter 7, or own property you cannot protect there
You owe debts that Chapter 7 leaves in place, such as recent taxes
How a Chapter 13 plan runs
One monthly payment, a judge who approves it and an end date.
- 01
Step 1: Budget
We list your income, bills and missed payments and find the monthly amount you can keep up.
- 02
Step 2: File
We file the case and your proposed plan. Collection calls, garnishment and a foreclosure sale generally stop, and your first plan payment comes due within about a month.
- 03
Step 3: Confirmation hearing
A few weeks later a judge decides whether to approve the plan. We attend with you and answer the trustee.
- 04
Step 4: Pay
You make one payment a month. If your income changes, we ask the court to change the plan, not to drop it.
- 05
Step 5: Finish
After the last payment, the court discharges the debts the plan covered and you own what you kept, free of the old arrears.
Chapter 13 questions
Before you commit to a plan
What if I miss a plan payment?
Call us before the due date if you can. A missed payment can often be made up or the plan adjusted. Several in a row can lead the trustee to ask the court to dismiss the case.
Can I file if I am self-employed?
Yes. The plan is built on what you really bring in. Bring your recent profit-and-loss numbers or bank statements.
What happens to my regular mortgage payments?
The ongoing payments continue. The missed ones go into the plan, so you pay them back over time instead of all at once.
Why does it take three to five years?
The length depends on your income and on what the plan has to pay, such as back mortgage payments or taxes. We tell you the likely length before you decide.
Ask what a plan would look like
Bring your last pay stub and any letters about the house or car. We will show you a monthly number.
The first call is free and does not start a case.