Christopher Todd Morrison, P.C.
Affordable Bankruptcy
713-396-3704

Should I file for Chapter 13 bankruptcy?

People often think that their only option to get relief from debt is to file for Chapter 7 bankruptcy and have all or most of the debt discharged. However, before you resolve yourself to this solution, keep in mind that there are other forms of bankruptcy, including Chapter 13.

In this post, we will examine two critical factors in determining whether this type of bankruptcy may be a good option for you to consider: your debt and your ability to repay it.

What does your debt look like?

Through Chapter 13 bankruptcy, debt will be re-prioritized and then much of it will be repaid. The highest priority debts are repaid first, and often in full.

Lower priority debts, as well as secured debts, will typically get at least partially repaid. Some debts may be discharged.

Depending on whether your debts are high priority, secured or unsecured, you could find little or considerable financial relief by filing for Chapter 13 bankruptcy.

Are you a good candidate for a repayment plan?

In order to file for Chapter 13 bankruptcy, you must meet eligibility requirements and be a good candidate for repayment plans.

  • If you have property you wish to protect, like your home or items used as collateral to secure a loan, you can be a good fit for Chapter 13 bankruptcy.
  • If you have less than $394,725 in unsecured debts and less than $1,184,200 in secured debts, you can be eligible for Chapter 13 bankruptcy. 
  • If you are earning money and can afford to repay debts once they are reorganized, then you can be a good candidate for Chapter 13.
  • If you can commit to the repayment plan through payroll deductions and budgetary adjustments, and if you can keep from incurring new debts, Chapter 13 can be a good option for you.

Next steps

If you read this and feel like Chapter 13 bankruptcy is a good fit for your situation, it can be a good idea to consult an attorney before going any further. A legal representative can help you understand the legal details of filing for Chapter 13 bankruptcy as well as the other options available. With effective guidance and support, you can find the debt relief solution that is best for you.

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