What is Chapter 13? A Chapter 13 is a wage earner proceeding.  A plan is created to pay back your debts at a reduced rate over a period of time.  The debtor pays a portion of his wages into the Court each pay period.  This money is then used by the Court to pay the debts.  The plan generally lasts from 3 to 5 years.  At the end of the plan, the debtor does not have to pay the remaining balance of the debts.

When should i file a chapter 13?  The four most frequent reasons for filing a Chapter 13 include:

  • The debtor’s house is being foreclosed.  Chapter 13 is the only proceeding that will stop a foreclosure and allow you to retain your home;
  • The debtor’s debts cannot be wiped out (discharged) in a Chapter 7;
  • The debtor owns too much property which cannot be kept (exempted) in a Chapter 7; or
  • The debtor wants to pay the debts but needs more time and the Court’s assistance.