Frequently Asked Questions About Chapter 13 Bankruptcy

At Richard Banks & Associates, P.C., we have been helping people with bankruptcy concerns in Cleveland and across Tennessee and North Georgia since 1974. Here are some of the most common questions our clients ask about Chapter 13 bankruptcy.

How long does a typical Chapter 13 repayment plan last, and what determines the length?

A plan typically lasts between three and five years. The length is determined by your income. If your income is less than your state’s median, your plan may be as short as three years. By law, no plan can last longer than five years.

Will I risk losing my property if I file for Chapter 13 bankruptcy?

No. One of the main benefits of Chapter 13 is that it allows you to keep all of your assets, including your home and car. By including your secured debts in the repayment plan, you can protect your property and catch up on missed payments.

How are my monthly payments calculated under a Chapter 13 plan?

Your monthly payment is calculated based on what you can reasonably afford. The court will look at your income and necessary living expenses to determine your “disposable income.” This amount is then used to calculate a fair monthly payment that allows you to repay your debts.

Can Chapter 13 stop home foreclosure, car repossession, wage garnishment and creditor harassment?

Yes. As soon as you file, the automatic stay immediately goes into effect. This powerful court order halts home foreclosure, car repossession, bank levies, wage garnishment and all communication from creditors.

What happens if my income increases or decreases while I’m in a Chapter 13 plan?

If your income significantly decreases, you may be able to modify your payment plan or convert your case to a Chapter 7. If your income increases, you may be required to pay a larger amount toward your debts. We can help you navigate these changes to your plan.

Can Chapter 13 help with my car loan?

Yes. In some cases, Chapter 13 can help you with your car loan by “cramming down” the loan’s principal to the car’s current market value. This is possible if you’ve owned the car for at least 910 days (about 2.5 years). The plan can also help lower your interest rate and catch up on missed payments.

What about co-signers?

Filing Chapter 13 also provides a co-debtor stay that protects individuals who co-signed for a debt with you. This prevents creditors from pursuing them for the debt while your plan is in effect.

Can I pay off my plan early?

The law states that a Chapter 13 plan can be paid off early only if you pay creditors the full amount you owe. We can help you determine the best option for your situation.

See What Your Payment Could Be – Free Review

Understanding your potential monthly payment is a crucial step. We can help you review your finances and see what a Chapter 13 plan could look like for you, all at no cost.

Call us at 423-219-3299 or fill out our online form to get started.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.