Chapter 13 Bankruptcy FAQ

Chapter 13 bankruptcy provides debt relief for hundreds of thousands of Americans each year. While Chapter 13 has grown in popularity, many people know very little about this type of bankruptcy.

In brief, Chapter 13 bankruptcy allows filers to create a debt repayment plan. While filers make reduced monthly payments on their debts, they are usually allowed to keep their homes, cars, and other valuable items.

Some of the basic features of Chapter 13 are listed below, in our Chapter 13 bankruptcy FAQ section:

Chapter 13 Bankruptcy Questions

While each bankruptcy case is different, many bankruptcy filers have similar questions about the debt relief process. Frequently asked questions about Chapter 13 include:

  • Will I have to see a judge? Usually, bankruptcy cases are handled by a trustee, so most filers never see a judge. Only if a creditor contests the case, and it cannot come to an agreement with the trustee, will a filer typically have to appear before a judge in a Chapter 13 case.
  • How long do I have to pay off debts? The duration of a Chapter 13 case varies by each bankruptcy plan, but a repayment period lasts between 36 and 60 months.
  • How much of my debt do I have to pay? In many cases, for unsecured debts, filers are expected to pay roughly 50 percent of the total debt, spread over 36-60 months. This amount will depend on your secured debt amount and monthly disposable income. If you make all of your payments on time, some unsecured debts may even be forgiven at the end of your Chapter 13 case.
  • What if I can't make my payments? If this occurs, and you are acting in good faith, you may be able to work out a new payment plan. If you still can’t make payments, you may be able to transfer to Chapter 7 bankruptcy. Some filers may also be eligible for a hardship discharge.
  • What about federal tax debts? In Chapter 13, you will make regular payments to the IRS just like other creditors through your debt payment plan. In addition, you'll still be required to file your annual income taxes outside of bankruptcy.

Contact a Chapter 13 Bankruptcy Attorney

The questions listed above highlight only a few of the common concerns many filers have. Part of the difficulty of creating a general Chapter 13 bankruptcy FAQ is that bankruptcy laws vary by state.

When seeking information on local bankruptcy rules, many filers prefer to speak with a local bankruptcy lawyer before filing their claim.

To connect with a bankruptcy attorney in your area today for a free consultation, you can simply fill out the form below:


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