ABA Family Legal Guide

Consumer Bankruptcy

Chapter 13: Wager-Earner or Individuals with Regular Income Bankruptcy

Chapter 13 Defined

What is Chapter 13 bankruptcy?

Chapter 13 allows individuals with regular incomes to pay a portion of their debts under a court-­approved payment plan and keep both their exempt and nonexempt assets.

If you have a steady income, Chapter 13 allows you to pay all or a portion of your debts under the protection and supervision of the U.S. Bankruptcy Court. The law requires that your payments to creditors be no less than they would have been if you had filed a Chapter 7 case. Under Chapter 13, you will keep all your assets (both exempt and nonexempt) while the plan is in effect and after you have successfully completed it.