How To File For Chapter 13 Bankruptcy

A Chapter 13 bankruptcy which is also known as the ‘wage earner’s plan’ is available to regular income earners to enable them to make full or partial payments of their loans. It is mostly used by individuals to avoid the loss of their properties, especially houses as long as they are making payments.

Filing a chapter 13 bankruptcy is a procedure that requires professional legal counsel and actions. It is the best option for those who want to clear their debts while keeping their assets.

How To File For Chapter 13 Bankruptcy

A chapter 13 bankruptcy is filed with the bankruptcy court in the debtor’s residential district. The following are required from the debtor by the court according to the United States Court are as follows;

  • Schedules of assets and liabilities
  • Schedule of current income and expenditures
  • A schedule of executory contracts and unexpired leases
  • A statement of financial affairs
  • A certificate of credit counseling
  • A copy of any debt repayment plan developed through credit counseling
  • Evidence of payment from employers, if any, received 60 days before filing
  • A statement of monthly net income and any anticipated increase in income or expenses after filing;
  • A record of any interest the debtor has in federal or state-qualified education or tuition accounts
  • A filing fee of $235 and a miscellaneous administrative fee of $75 can be paid in full or at most, in four installments which must be completed no later than 120 days after filing the bankruptcy.

Why You Should File For A Chapter 13 Bankruptcy

While filing for Chapter 13 enables you to keep your properties during the settlement of your outstanding debts, there are also other benefits that you can enjoy by using this option. They include;

  • You can settle your debts over a long period, usually around 3-5 years. This gives you enough time to adjust your income and spending habits.
  • Chapter 13 bankruptcy helps to design a feasible payment plan to settle debts promptly.
  • The plan helps to wipe out overwhelming debts so you do not have to pay up the amount owed anymore. This way, your debts are reduced and you do not have to pay your creditors in full after you have completed your repayment plan.
  • During the period that your chapter 13 bank is on, your creditors cannot harass you in any manner whatsoever, be it through phone calls, emails, lawsuits, or garnishments as you won’t be having any direct contacts with them.
  • Whilst on chapter 13 bankruptcy, your credit score does not suffer from missed and delayed payments of bills.
  • You get the chance to recuperate from your debts and build a healthy credit score after completing your repayment plan.

Cons Of Filing A Chapter 13 Bankruptcy

  • Chapter 13 bankruptcy does not eliminate all kinds of debts. Those debts that are not covered by chapter 13 bankruptcy include;
    • Child support fees
    • Spousal support fees
    • Student loans
  • Chapter 13 bankruptcy will stay on your credit reports for about 7 to 10 years.
  • You will lose all your credit cards
  • You will find it extremely difficult or impossible to get a mortgage
  • You will be in debt for around 3 to 5 years
  • All of your disposable income is channeled into your repayment plan.


The advantages of Chapter 13 bankruptcy make it a good choice for the settlement of debts. It does not only allow you to keep your assets, but it also helps you to reduce your debt amount while giving you a longer payment duration without any fear of harassment and garnishments from your creditors.

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