Chapter 13 Bankruptcy: What Is It, and Would It Help You?

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is a type of debt relief that allows you to pay back your debts over time. Contrary to its name, it’s not the only type of bankruptcy. Chapter 7 and Chapter 11 are also available, and while they’re much more complicated than Chapter 13, they can be helpful in certain cases. If there’s a chance that you could qualify for Chapter 13 bankruptcy, it’s a good idea to find out as soon as possible. In a chapter 13 bankruptcy, you file a plan with the court over several months. Once approved, the plan is enforced by the court. You work out an agreement with creditors over how to repay what you owe. The plan can be amended at any time if there’s an unforeseen hardship or if you have new needs or ideas.

Chapter 13 bankruptcy is a form of debt relief that allows you to make both income-based and non-income-based payments. Unlike Chapter 7 bankruptcy, most Chapter 13 plans permit you to pay back your debts during the plan period. The difference between Chapter 7 and Chapter 13 is that in Chapter 7, you pay nothing for the first year that your repayment plan is in effect. In Chapter 13, you work out a repayment plan with creditors. Your creditors are in favour of this bankruptcy because you’re distributing payments over a long period, which leaves them with a much better chance of recouping their losses.

How Does Bankruptcy Chapter 13 Work?

Once you’ve filed for Chapter 13 relief, the court schedules a hearing to review your plan. If there are problems with your plan, the court might make changes to it. The court will also review your finances and your ability to pay back debts during the plan period. Once this review is complete, the judge will approve or deny your plan. Your creditors are required to accept your plan as long as it’s within legal limits and meets certain requirements.

When you file for Chapter 13 relief, you must pay a “discharge fee”, which is an amount determined by the court. The value of your car or other assets is treated as a liquidation of your property for purposes of this fee. Once the discharge fee has been paid, creditors can agree to accept the plan. Once your plan has been approved, you will have to file monthly payments until all debts have been paid in full. Payment can be made to one creditor, or you can make instalment payments to several different creditors.

What Does a Chapter 13 Repayment Plan Look Like?

A Chapter 13 repayment plan is made up of three main parts: the first is the plan itself, which tells your creditors what you’re going to pay monthly while you’re in the plan and how much you need to pay them over a three- to five-year period; second is the updates, which allow you to change your plan if necessary in response to changing circumstances; and third is the certificates. Certificates serve as official proof that your creditors have agreed or must agree to accept payment based on your plans.

You can make your plan as detailed or as simple as you like. It’s a good idea to include a list of things that are going to cost money for the next few years. This is because you’re going to need to pay these things with your monthly payments, so knowing what they are will help you be more clear on what you have available to pay these expenses. For instance, this could include healthcare costs, car payments, monthly mortgage bills and so on.

How to File for Chapter 13 Bankruptcy?

In order to file for Chapter 13 bankruptcy, you will need to complete a simple application. You will be required to list the names, addresses and phone numbers of any creditors you may have. You will also need to list the number of your debts and the monthly payment amount you intend to make. Another important element is that you must explain why filing for Chapter 13 bankruptcy is appropriate for you. You’ll also need to show that you would struggle to pay back your debts without this type of debt relief plan in place. You will need to also pay the required “dismissing fee” in order to file a petition for Chapter 13 bankruptcy. Chapter 7 of the Bankruptcy Code allows a debtor to stop some, and sometimes all, debt repayments. It is an easier, less complicated process than Chapter 13 but requires more work by the debtor.

To learn more about chapter 13 bankruptcy, refer to this link to a law firm that knows about all the bankruptcy laws and handles chapter 13 bankruptcies. 


Chapter 13 bankruptcy is a form of debt relief that allows you to repay your debts over time. You’ll make monthly payments on the debts that you owe to creditors. Depending on your income, you may only be required to pay a small percentage of what was initially owed. It’s important to note that the court does not allow personal exemptions in this type of bankruptcy, just hardship and expense deductions. These are things like work expenses, medical bills and child support costs incurred to keep your business running smoothly.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.