Chapter 13 bankruptcy

What It Means

Chapter 13 is the repayment chapter of the federal BankruptcyBankruptcyA federal court process for people and businesses that can't pay their debts, ending in a discharge of many debts after an asset sale or a repayment plan. See more Code, often used by people with regular income who want to keep their property. You propose a plan to pay creditors in installments over three to five years, and the court must approve it. U.S. Courts explains that the length depends on income: below your state's median, the plan runs three years unless the court allows longer for cause, and above it, the plan generally runs five.

How People Say It

• "Chapter 13 let us keep the house and catch up over five years."
• "We send the plan payment to the trustee every month."
• "Two more years and we're done with the plan."

The Breakdown

What the rule says. In Chapter 13 you keep your property and pay creditors through a plan the court confirms. The plan runs three years if your current monthly income is below your state's median, unless the court approves a longer period for cause, and it generally must run five years if your income is above it. Filing starts the automatic stay, which U.S. Courts says stops most collection, including foreclosure, while the case goes on.

Who it applies to. People with regular income who can make a monthly plan payment, often because they want to keep a home or car that a Chapter 7Chapter 7 bankruptcyA form of bankruptcy in which a court trustee sells property the law doesn't protect to pay creditors, and most remaining debts are discharged, usually within months. See more trustee might otherwise sell. Your income is measured against U.S. Trustee Program median figures; its spring 2026 update applies to cases filed on or after April 1, 2026.

Worked example. A couple below their state's median files in 2026 with an example plan payment of $600 a month:

Documents needed

• The certificate from credit counselingCredit counselingAdvice from a trained counselor, usually at a nonprofit agency, on your budget and debts, which can lead to a debt management plan or other next steps. See more taken within 180 days before filing
• The petition, schedules of assetsAssetsThings you own that are worth money, such as cash, investments, a home or a car. Your assets minus your debts is your net worth. See more, debtsLiabilitiesDebts and other money you owe, such as a mortgage, a car loan or a credit card balance. Your assets minus your liabilities is your net worth. See more, income and expenses, and a statement of financial affairs
• The proposed repayment plan
• After filing, the certificate from an approved debtor education course, before the discharge

Official source. U.S. Courts, "Chapter 13: Bankruptcy Basics," and the U.S. Trustee Program's means testing pages, checked September 30, 2026.

Good to Know

A Chapter 13 lasts years, so the plan payment has to fit a budgetBudgetA plan for a set period, usually a month, that lists the money you expect to receive and how you'll spend or save it. See more that also covers rent or the mortgageMortgageA loan used to buy or refinance a home, secured by the home itself and repaid in monthly installments over a set term. See more, food and the car. Experian and TransUnion say a Chapter 13 comes off your credit report seven years after the filing date, sooner than the up to 10 years a Chapter 7 can stay. Talk to a bankruptcy attorney or legal aid office before choosing a chapter, since the right one depends on your income, property and debts. The court's clerk or website lists the current filing fee.

Related Terms and Categories

• Bankruptcy

  A federal court process for people and businesses that can't pay their debts, ending in a discharge of many debts after an asset sale or a repayment plan.

• Chapter 7 bankruptcy

  A form of bankruptcy in which a court trustee sells property the law doesn't protect to pay creditors, and most remaining debts are discharged, usually within months.

• Credit counseling

  Advice from a trained counselor, usually at a nonprofit agency, on your budget and debts, which can lead to a debt management plan or other next steps.

• Debt management plan

  A repayment plan set up by a credit counseling organization: you make one monthly payment to it, and it pays your creditors, often at lower rates.

• Credit report

  A record of how you've borrowed and repaid, kept by credit bureaus and sold to lenders, landlords, insurers and others who decide whether to deal with you.

• Secured debt

  Money you owe that's backed by collateral, such as a home or car, which the lender can take if you don't repay.

Debt and credit