Is Chapter 13 Bankruptcy Right for Me?

Is Chapter 13 Bankruptcy Right for Me?

Filing for bankruptcy is never an easy decision. It can improve the quality of your life in the short-term. It can adversely affect your reputation and your credit score in both the short- and long-term. While individuals are allowed to file for bankruptcy under Chapter 7 or Chapter 13 of the federal bankruptcy code, many select Chapter 13, which temporarily prevents creditors from collecting while allowing people to pay off their debts over 3-5 years, without having to sell off most of their assets.

If you or a loved one have fallen into debt, here’s a list of Pros and Cons that may help you decide whether Chapter 13 bankruptcy is right for you.


  • Once you file your paperwork with the court and pay the filing fee ($310), an automatic “stay” takes effect, preventing creditors from pursuing actions against you.
  • Any legal proceedings taken against you must also stop.
  • Your property and income will be temporarily safe from seizure or wage garnishment.
  •  The trustee will communicate with your creditors. They are not allowed to contact you directly.
  • You might be able to secure new lines of credit within 1-3 years of filing Chapter 13 bankruptcy.
  • You can set up a repayment plan that works for you with the approval of the bankruptcy trustee. For example, you could draft a plan that makes your mortgage payments smaller than before and extending for a longer period of time. If you stick with the plan and make the smaller payments monthly, you may be able to keep your home.


  • Chapter 13 bankruptcy will lower your credit score for up to 10 years.
  • You will lose all your current credit cards.
  • It could take up to five years to pay off your debt.
  • Your debts will be paid out of your disposable income (not counting your expenses for food, shelter and medical care). Literally all your cash will be devoted to paying off debt for the next five years.
  • Some debt will not be discharged, as in almost all cases you will be required to pay off your student loans, child support and alimony in full.
  • Your name will be made public in court records, including your explanation to the judge or trustee about how you got yourself into this situation.

There are many factors that must be considered before filing for Chapter 13 bankruptcy protection, as an attorney, like a bankruptcy law attorney from a firm such as Winfrey Law Firm, PLLC, can explain.