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Chapter 13 Bankruptcy

Bankruptcy Filing

Unlike the faster Chapter 7 bankruptcy, a Chapter 13 is a payment plan. Your income and expenses are calculated to determine how much disposable income you can pay. Then, a plan is created to show how much can be paid over the length of either three or five years, depending on your income.

Basically you pay back however much debt you can, as determined in the bankruptcy plan, and once the plan is completed you have no delinquent debt and should be "caught up".

As opposed to Chapter 7 bankruptcy, a Chapter 13 does not simply discharge debts, but does pay them down. Interest rates can be reduced drastically in the plan to assist.


It can last either three or five years, so is not a fast solution, but no assets are collected or sold. For this reason, Chapter 13 bankruptcy is often the only option for those who stand to lose substantial assets.

If you are thinking about a Chapter 13 or Chapter 7 bankruptcy, contact a bankruptcy lawyer right away. Trying to do it yourself might mean you pay too much or lose assets you could have kept.

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