Chapter 13 bankruptcy works well for higher-income earners who need financial relief and those who don’t want to risk losing a home, car, or other important property in Chapter 7. The flexible three- to five-year repayment plan allows filers to use their funds toward more critical obligations, like house and car payments, taxes, and support obligations, while paying less toward credit card balances, medical bills, personal loans, and other dischargeable debts.
Stop creditors. Get more time to pay.
Filing for Chapter 13 bankruptcy stops creditors, lawsuits, wage garnishments, bank levies, and other collection actions, giving you time to restructure debts in a three- or five-year repayment plan. Each monthly payment goes primarily toward the debts that matter most—your mortgage, car loan, support obligations, and taxes. Credit card balances, medical accounts, and utility bills usually receive a small fraction of the balance. Chapter 13 filers can also use the plan to avoid foreclosure and vehicle repossession or pay to keep property they’d lose in Chapter 7 over time. Sometimes, they can even reduce or eliminate secured loans.
This guide explains the benefits of Chapter 13 and more, including how to find and hire the right lawyer and calculate the monthly payment. It also covers what to expect during the process, which debts get erased after completing plan payments, how to rebuild credit after the case ends, and more.
