Overview of Chapter 13 Bankruptcy

Chapter 13 bankruptcy, often called a “reorganization bankruptcy,” allows individuals with regular income to repay all or a portion of their debts over time while protecting their assets. It is commonly used by debtors who wish to save their home, catch up on past-due payments, protect an unexempt asset, or who do not qualify for Chapter 7.

In a Chapter 13 case, the debtor proposes a repayment plan lasting three to five years. The plan consolidates eligible debts into one monthly payment made to a Chapter 13 trustee, who then distributes payments to creditors according to the plan and the Bankruptcy Code. So long as plan payments are made, creditors may not pursue collection efforts.

Chapter 13 is available to individuals with regular income who fall within the statutory debt limits. Unlike Chapter 7, there is no means test disqualification, making Chapter 13 an option for those who earn too much to qualify for Chapter 7. Upon successful completion of the plan, remaining eligible unsecured debt may be discharged.

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For more than 40 years, Mezher Law has guided individuals and small businesses through Chapter 7 and Chapter 13 bankruptcy.

Why Mezher Law for Chapter 13

Chapter 13 is not just a filing. It is a long-term financial plan that requires careful strategy.

  • We analyze your income, expenses, assets, and goals to design a repayment plan that protects what matters most, whether that is your home, your vehicle, or your ability to stay current over the life of the case.

Your attorney represents you for the life of the Chapter 13, including when circumstances change and the plan needs to be revisited.

Who Chapter 13 Is For

Chapter 13 is a long-term financial plan, not a quick liquidation. It is often the right path when you need time to catch up on a house or car, when you want to protect an asset, or when you do not qualify for Chapter 7.

  • Individuals or married couples with regular income
  • Small businesses impacted by financial struggles
  • Homeowners who need time to catch up on a mortgage
  • Filers who do not qualify for Chapter 7
  • People who need to stop foreclosure, repossession, or garnishment and keep making payments under a court-approved plan

Debts Addressed in Chapter 13

The plan can address both secured and unsecured debts. Which debts are paid in full, paid in part, or discharged at the end of the plan depends on the Bankruptcy Code and the facts of the case.

  • Catch up on past-due mortgage or car payments
  • Pay tax debts over time
  • Address domestic support arrears
  • Reduce or restructure certain secured debts
  • Pay a portion of unsecured debts, such as credit cards and medical bills
  • Include student loans in the plan even though they are generally not discharged

Benefits of Filing Chapter 13

Filing generally triggers an automatic stay that can stop foreclosure, repossession, garnishment, and lawsuits while the plan is in place. The stay can remain in place for the full three- to five-year repayment plan so long as payments are made.

  • Immediate protection from foreclosure, repossession, garnishment, and lawsuits through the automatic stay
  • Ability to cure mortgage arrears and keep your home
  • Structured repayment based on income and reasonable expenses
  • Potential to reduce the balance on certain secured debts
  • Protection for co-signers in many cases

How a Chapter 13 Case Moves Forward

You provide documents. We analyze your income, expenses, assets, and goals, then prepare the petition and a repayment plan. After you review and sign, the case is filed in federal court. We attend the meeting of creditors with you and stay with the matter for the life of the plan.

Plan payments go to a Chapter 13 trustee, who distributes them to creditors. A credit score may drop upon the initial filing, but it often improves over the course of the case. Upon successful completion, remaining eligible unsecured debt may be discharged.

If circumstances change during the case, there may be options to reduce the plan payment or convert the case to a Chapter 7. Incurring new debt while a Chapter 13 is pending is possible, but certain motions and approval by the bankruptcy court are required.

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FAQs

Chapter 7 is typically a faster liquidation case for qualifying unsecured debt. Chapter 13 is a three- to five-year repayment plan that can help you catch up on a mortgage or car loan, protect assets, and still address other debts. Unlike Chapter 7, Chapter 13 has no means test disqualification.

Chapter 13 is commonly used to keep a home or vehicle. Through the plan you can catch up on past-due mortgage or car payments while the automatic stay stops foreclosure or repossession, so long as plan payments are made.

A Chapter 13 plan typically runs three to five years. Complexity, missing documents, or objections can add time.

Your attorney represents you for the life of the Chapter 13. If circumstances change, there may be options to reduce the plan payment or convert the case to a Chapter 7.

Yes, it is possible, but certain motions and approval by the bankruptcy court are required.

A credit score may drop upon the initial filing, but it often improves over the course of the case.

Testimonials & Results

What to Expect

Here is how working with Mezher Law typically moves forward on a bankruptcy matter:

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