Chapter 13

Essential Information About Chapter 13 Bankruptcy

Chapter 13 is a great chapter! It allows you to send a payment to a Chapter 13 trustee each month, who then disburses those funds to your creditors based only on what they are entitled to receive--It does NOT mean your creditors will be paid in full.  It also protects you from your creditors while in the case and discharges nearly all remaining balances owing at the end of your case.

The discharge in Chapter 13 covers many debts that cannot be discharged in a Chapter 7.

It is a great option for you if you want to keep your assets but get out of your current financial situation and pressure.


While there are Many reasons people choose to file a Chapter 13, a few common ones are when:

  • You are behind on home or auto payments and want to keep them but need time to catch up;
  • You want to “strip” a second mortgage off your home;
  • You want to avoid liens or judgments;
  • You are in arrears for alimony or child support;
  • You may pay back the IRS without penalties, interest or in full;
  • Owe debts not dischargeable in a Chapter 7 like taxes, domestic support, and marital debt obligations;
  • Assistance with student loans;
  • Pay only for what your car is worth, not what you owe;
  • Pay less for your mobile home;

Other great things about Chapter 13

There are procedures where you can get approval from the court to purchase things like a home or automobile that are not available in a Chapter 7 (we have never had the court deny our request to purchase a home or car while a client of ours was in their Chapter 13 case).

Additionally, you are not stuck in a Chapter 13. You can amend your case as your life and circumstances change. There is a lot of flexibility in a Chapter 13, it’s up to you!