Debt

Chapter 13 Bankruptcy A reorganization bankruptcy that lets you keep your assets and repay debts through a court-approved plan

Jordan Park By Jordan Park, Senior Debt Relief Editor · Updated 2026-06-09
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Chapter 13 bankruptcy is a 'reorganization' filing under 11 U.S.C. Chapter 13 that lets you keep your assets while repaying creditors through a court-approved repayment plan. Unlike liquidation bankruptcy, you don't surrender property; instead, you commit your disposable income to a 3-5 year plan based on what you earn. The court and a trustee oversee the payments, which are distributed to your creditors over the plan's life. Filing triggers an automatic stay that can stop a foreclosure, giving you time to catch up on missed mortgage payments. A Chapter 13 filing stays on your credit report for 7 years, which can affect your ability to borrow during that period. Whether this option fits your situation depends on your income, debt levels, and the property you want to protect, so outcomes vary by case.
Also Known As
Chapter 13 Wage Earner's Plan Reorganization Bankruptcy 11 U.S.C. Chapter 13
Used in Context
  1. Facing a foreclosure sale date, she filed Chapter 13 bankruptcy to stop the process and spread her missed mortgage payments across a 5-year plan.
  2. Because he had steady income but couldn't cover all his debts at once, his attorney recommended Chapter 13 over liquidation so he could keep his car and home.
  3. A homeowner who clicked a debt-relief ad through Dreamy Leads was later told a Chapter 13 plan might let him keep his house while catching up on arrears.
Related Terms
Debt Chapter 7 Bankruptcy A liquidation bankruptcy that can wipe out most unsecured debts in a few months Debt Automatic Stay The court order that instantly freezes most collection the moment you file bankruptcy Debt Bankruptcy Means Test The income screen that decides whether you qualify for Chapter 7 bankruptcy Debt FDCPA (Fair Debt Collection Practices Act) Federal law that limits how third-party debt collectors can contact and treat you
Frequently Asked Questions

How long does Chapter 13 stay on your credit report?

A Chapter 13 bankruptcy stays on your credit report for 7 years. During that time it can affect your ability to qualify for new credit, but its impact often lessens as you rebuild and as the filing ages.

Can Chapter 13 stop a foreclosure?

Yes. Filing Chapter 13 triggers an automatic stay that can stop a foreclosure. The 3-5 year repayment plan lets you make up missed mortgage payments over time while keeping your home, though results depend on your income and plan approval.

Do you lose your property in Chapter 13?

No. Chapter 13 is a reorganization bankruptcy where you keep your assets and repay creditors through a court-approved 3-5 year plan based on your income. This differs from liquidation bankruptcy, where some property may be sold to pay creditors.

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