Chapter 13 Bankruptcy
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Chapter 13 Bankruptcy: Everything You Need to Know
What Is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy, also known as a the “wage earner’s plan,” is designed for people with steady income who want to reorganize their debts, catch up on past-due payments, and keep their property. Instead of wiping out debt like Chapter 7, Chapter 13 gives you a structured repayment plan lasting three to five years.
How Chapter 13 Bankruptcy Works
You and your attorney propose a repayment plan based on your income, expenses, and types of debt.
You make monthly payments to a court-appointed trustee, who then pays your creditors. Unlike Chapter 7, Chapter 13 allows you to catch up on missed mortgage or car payments while keeping your assets.
Types of Debts That Can Be Discharged
Chapter 13 plan may cover:
Credit card debt
Credit card debt
Credit card debt
Medical bills
Personal loans
Payday loans
Student loan
(typically not dischargeable but can be included in the plan)
Advantages of this option
What Are The Benefits of Chapter 13 Banktrupcy?
Avoid foreclosure and catch up on mortgage payments
Keep all your property, including non-exempt assets
Stop repossessions, garnishments, and collections
Reduce or eliminate unsecured debt
Protect co-signers from collection efforts
Commitment & Solutions
How We Help
At Compassion Debt Relief Solutions, we help you understand if Chapter 13 is a fit, assist with budgeting and documentation, refer you to licensed attorneys in your state, and support you throughout the plan with tools and coaching to rebuild.
100% Safe & Confidential
Compassionate & Judgement-Free
Quick & Clear Explanation
Chapter 13 Bankruptcy
Frequently Asked Questions
Debt settlement is most effective for unsecured debts, including:
+ You and your attorney create a repayment plan based on your income, expenses, and debts.
+ You make one monthly payment to a court-appointed trustee.
+ The trustee distributes the money to your creditors.
+ You can catch up on missed mortgage or car payments while keeping your assets.
Your repayment plan may cover:
+ Mortgage or rent arrears
+ Auto loans
+ Credit cards
+ Medical bills
+ Personal loans
+ Tax debts
+ Student loans (typically not dischargeable, but they can be included in the plan)
Certain debts cannot be reduced or discarded under Chapter 13, such as:
+ Priority tax debts
+ Domestic support obligations (child support and alimony)
+ Mortgage payments on property you want to keep
+ Court fines and criminal restitution
You may qualify if you:
+ Have regular income (employment, self-employment, pensions, etc.)
+ Have unsecured debts under $465,275 and secured debts under $1,395,875 (2024 limits)
+ Are current with your income tax filings
Is this really free?
Is this really free?
Most repayment plans last three to five years:
+ Three years if your income is below your state’s median
+ Five years if your income is above the median You must make monthly payments on time for the plan to succeed and to receive a discharge at the end.
+ Stop foreclosure and catch up on mortgage payments
+ Keep your home, vehicles, and other assets (even non-exempt property)
+ Prevent repossessions, wage garnishments, and collection calls
+ Reduce or eliminate unsecured debts
+ Protect co-signers from collection actions
+ Requires a three to five year commitment to monthly payments
+ You must have steady income and strong discipline
+ Generally more expensive than Chapter 7 (higher attorney fees and longer repayment period)
+ Stays Remains on your credit report for seven years
If you fall behind, the trustee can ask the court to dismiss your case. However, you may have options such as:
+ Modifying your repayment plan
+ Requesting a temporary suspension of payments
+ Converting to Chapter 7 (if you qualify)
If you fall behind, the trustee can ask the court to dismiss your case. However, you may have options such as:
+ Modifying your repayment plan
+ Requesting a temporary suspension of payments
+ Converting to Chapter 7 (if you qualify)
+ Filing fee: $313
+ Attorney fees: $3,000–$5,000 (usually included in the repayment plan)
+ Credit counseling and debtor education: ~$20–$50 total
At Compassion Debt Relief Solutions, we:
+ Help you understand if Chapter 13 is a the right fit for your situation
+ Assist with gathering documents and creating a realistic budget
+ Refer you to licensed attorneys in your state
+ Support you throughout the plan with tools and coaching to rebuild
Ready to Explore Chapter 13?
If you have steady income and want to protect your assets while getting out of debt, Chapter 13 could be a smart solution.