Skip to Content

Though Chapter 13 bankruptcy can be a great way to pay off debt, it isn’t for everyone. Generally speaking, it may be right for you if you fit the following qualifications:

  • Have a stable income. To repay your debts over a long period, you will need to have a steady income that you can depend on. The bankruptcy court will establish a payment plan based on your current income, which you must maintain in order for the plan to be effective. If you experience frequent fluctuations in your income, Chapter 13 might not be the best choice.
  • Own a home. If you own a home, Chapter 13 is probably better for you than Chapter 7. Chapter 13 is designed to help you catch up with missed mortgage payments and stay current on new ones, allowing you to stay in your home and avoid foreclosure. Chapter 7 may not necessarily be able to accomplish this.
  • Have valuable personal property. Unlike Chapter 7, Chapter 13 will not require you to sell any valuable personal property, such as jewelry or antiques, in order to pay debts. Instead, Chapter 13 will simply establish a payment plan so that you can become current with your debts, without needing to liquidate property.
  • Can commit to living on a strict budget. As part of a Chapter 13 plan, all of your disposable income will be given to the bankruptcy trustee to pay your debts. You will need to become accustomed to living on a very limited budget, with almost no extra money. Though this may not be the lifestyle you are used to, it will allow you to get out of debt.
The materials available at this website are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use and access to this website or any of the links contained within the site do not create an attorney-client relationship. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.