{"id":286918,"date":"2016-04-04T10:41:50","date_gmt":"2016-04-04T15:41:50","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/bankruptcy\/chapter-13\/chapter-13-reorganization-bankruptcy.html"},"modified":"2025-08-23T13:20:37","modified_gmt":"2025-08-23T18:20:37","slug":"chapter-13-reorganization-bankruptcy","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/bankruptcy\/chapter-13\/chapter-13-reorganization-bankruptcy.html","title":{"rendered":"Chapter 13 Reorganization Bankruptcy"},"content":{"rendered":"\n
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Chapter 13 Reorganization Bankruptcy<\/h1>\n\n
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\n By Christie Nicholson, J.D.<\/a> | Legally reviewed by Jordan Walker, J.D.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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Chapter 13 reorganization bankruptcy is a court-supervised repayment plan for individuals with regular income to catch up on debts over three to five years while keeping their property. Instead of wiping out debts upfront, you propose a plan to pay priority and secured obligations in full and devote disposable income to unsecured debts, after which remaining eligible balances can be discharged.<\/i><\/p>\n\n <\/div>\n\n\n\n

The two main\u00a0types of bankruptcy<\/a>\u00a0for individual debtors are Chapter 7 and Chapter 13. With a Chapter 7 bankruptcy,\u00a0often referred to as a liquidation bankruptcy, the court discharges the filer’s debts and gives them a fresh start.<\/p>\n

Chapter 13 bankruptcy<\/a>\u00a0is classified as a reorganization bankruptcy. It’s for people who have assets and want to keep them. Rather than dismissing the debtor’s debts, the bankruptcy judge in a Chapter 13 allows the debtor to reorganize their debt and settle into a payment plan.<\/p>\n

This article will explain\u00a0\u00a0how a Chapter 13 bankruptcy works, including the eligibility requirements and the role of the Chapter 13\u00a0bankruptcy trustee<\/a>.<\/p>\n

If you’re considering filing a Chapter 13 bankruptcy petition, consider meeting\u00a0with an experienced\u00a0bankruptcy attorney<\/a>. They’ll explain the bankruptcy basics and help you decide if Chapter 13 is your best option. They’ll also help you create a repayment plan and deal with any objections from\u00a0your secured and unsecured creditors.<\/p>\n

Eligibility for Chapter 13 Reorganization Bankruptcy<\/h2>\n

Before filing for Chapter 13 bankruptcy, you must be able to show that you meet the eligibility requirements. With a\u00a0Chapter 7 bankruptcy case<\/a>, the filer must only show that they pass the\u00a0means test<\/a>.\u00a0This test requires that they show their monthly income is less than their state’s median income.<\/p>\n

Chapter 13 bankruptcy is different. Unlike Chapter 7 bankruptcy, Chapter 13 requires that you have sufficient regular income to make monthly payments to your creditors through a payment plan. If the trustee or bankruptcy judge doesn’t believe you can afford to make payments under your\u00a0Chapter 13 plan<\/a>, they may dismiss your case or suggest that you file for Chapter 7 instead.<\/p>\n

Specific Limitations for People Filing Chapter 13 Bankruptcy<\/h2>\n

In addition to the above legal requirements, there are other specific criteria you must meet to qualify for Chapter 13. For example, the U.S. Bankruptcy Courts impose\u00a0debt limits<\/a>\u00a0for those people considering Chapter 13 bankruptcy.<\/p>\n

Effective from April 2025 until March 2028, you cannot file Chapter 13 if you owe more than $1,580,125 in\u00a0secured debt<\/a>\u00a0or $526,700 in unsecured debt. If your total debt exceeds these limits, you may have to consider filing Chapter 7 bankruptcy instead.<\/p>\n

Unsecured debts are accounts you have that are not collateralized by property. The most common types of\u00a0unsecured debt<\/a>\u00a0are credit cards, medical bills, and personal loans. Secured debts, on the other hand, are accounts that are attached to an asset. For instance, mortgages and car loans are secured debts.<\/p>\n

When you submit your\u00a0bankruptcy petition<\/a>, you must include a list of your debts and assets. The bankruptcy courts refer to these forms as \u201cschedules.”\u00a0The Chapter 13 trustee will review this information to confirm that you meet the eligibility requirements. If you don’t, the trustee will object to your petition.\u00a0You can either modify\u00a0and resubmit it, or file a Chapter 7bankruptcy case instead.<\/p>\n

Chapter 13 Reorganization Process<\/h2>\n

Before filing for bankruptcy, you must complete credit counseling and a debtor education course from an agency approved by the\u00a0United States Trustee’s office<\/a>. Unless you qualify for a fee waiver, you must pay for these courses.<\/p>\n

Once you complete the class, you will receive a certificate of completion. You must submit a copy of this certificate with your bankruptcy petition, along with the other bankruptcy forms and the filing fee of $313.<\/p>\n

When you file your papers with the U.S. Bankruptcy Court, you must provide the following information:<\/p>\n