Chapter 13 Bankruptcy: Frequently Asked Questions

We’ve provided some helpful information about Chapter 13 bankruptcy and the benefits it offers. For an in-depth look at your specific situation, please call us in Tyler, Texas, at 903-920-0008 or complete our contact form. William H. Lively, Jr. WHL, PLLC, serves clients throughout East Texas. We offer free initial consultations.

How does Chapter 13 work?

Chapter 13 bankruptcy allows you to set up a repayment plan to resolve your debts. In other words, Chapter 13 is different than Chapter 7, which requires debtors to sell their assets to pay back creditors. Chapter 13 lets you set up a repayment plan instead of having to sell your possessions. To learn more about how Chapter 13 works, please see our overview of the Chapter 13 process.

How long is the Chapter 13 repayment plan?

With Chapter 13, you can reschedule your secured debts so you can pay them off over the course of three to five years. When your debts are rescheduled over that period of time, the monthly payments are lowered and become more affordable. Our overview of the benefits of Chapter 13 provides more helpful information.

What types of debts can be included in a Chapter 13 repayment plan?

Chapter 13 allows you to reorganize various debts:

• Secured debts: Like mortgage arrears or car loans, which you may repay to keep your property.
• Unsecured debts: They include credit cards, medical bills and personal loans.
• Priority debts: These include child support, alimony and certain taxes.
• Co-signed debts: You can repay these under Chapter 13 to protect co-signers from collection.

Chapter 13 offers flexibility in managing all your debt types through a single payment plan.

Who is eligible to file for Chapter 13 bankruptcy?

To qualify for Chapter 13, you must meet these criteria:

• Steady income: You need regular income to support the repayment plan.
• Debt limits: Your secured debts must be under $1,395,875, and unsecured debts must be under $465,275 (as of 2025).
• Tax filings: You must be current on your tax returns for the past four years.
• No recent bankruptcy dismissals: You cannot have had a bankruptcy case dismissed in the last 180 days.

Meeting these requirements helps ensure the court will accept your repayment plan.

Can Chapter 13 stop creditor harassment and wage garnishment?

Yes. Once you file for Chapter 13, an automatic stay takes effect. This legal order:

• Stops creditor calls and letters.
• Halts wage garnishments.
• Pauses foreclosures, repossessions and lawsuits.

The automatic stay gives you breathing room and legal protection while you follow your repayment plan.

What happens if I cannot make my Chapter 13 plan payments?

If you fall behind, you have a few options:

• Modify the plan: You can request lower payments based on your new financial situation.
• Temporarily suspend payments: With court approval, you can pause payments for a brief period.
• Case dismissal: If no solution is found, your case may be dismissed, and creditors can resume collection efforts.

A lawyer can help you act quickly to avoid case dismissal or property loss.

How does Chapter 13 affect my credit score, and how long does it stay on my credit report?

Chapter 13 can lower your credit score. However:

• It stays on your report for 7 years from the filing date.
• You can begin rebuilding your credit during the plan by engaging in responsible financial behavior.
• Some lenders view Chapter 13 more favorably than Chapter 7 because you repay debts.

While it impacts your credit, Chapter 13 also gives you a path to regain control of your finances.

Can Chapter 13 help me keep my home and car?

One of the benefits of Chapter 13 bankruptcy is that the court puts an automatic stay on foreclosure and repossession proceedings. If you are behind on mortgage and car payments, Chapter 13 may help you keep your house and car while you make affordable monthly payments based on your rescheduled repayment plan.

Do I need a bankruptcy lawyer to file for Chapter 13 protections?

It is strongly recommended that you do not try to navigate the bankruptcy process on your own. The protections and benefits of bankruptcy can be great, but it’s important to have an experienced bankruptcy attorney represent you and guide you through the process. For more on that, please see our overview of choosing the best bankruptcy lawyer for your specific case.

Start Your Free Consultation

We are a local law firm known for getting outstanding results for our clients. Attorney Bill Lively can answer your questions and help you determine whether filing for Chapter 13 bankruptcy is the right decision for your specific situation. Please call us at 903-920-0008 or fill out our contact form to set up a free consultation. Our law office is in Tyler, and we represent clients throughout East Texas.

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