{"id":286925,"date":"2017-05-18T16:25:03","date_gmt":"2017-05-18T21:25:03","guid":{"rendered":"https:\/\/ability-fl-prod.internetbrands.com\/ability-law\/bankruptcy\/chapter-13\/pros-and-cons-of-declaring-bankruptcy-under-chapter-13.html"},"modified":"2026-07-29T13:38:12","modified_gmt":"2026-07-29T18:38:12","slug":"pros-and-cons-of-declaring-bankruptcy-under-chapter-13","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/bankruptcy\/chapter-13\/pros-and-cons-of-declaring-bankruptcy-under-chapter-13.html","title":{"rendered":"Is Chapter 13 Bankruptcy Right for You? Pros and Cons Explained"},"content":{"rendered":"\n
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Is Chapter 13 Bankruptcy Right for You? Pros and Cons Explained<\/h1>\n\n
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\n By Christie Nicholson, J.D.<\/a> | Legally reviewed by Catherine Hodder, Esq.<\/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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Key Takeaways<\/h2>\n

Chapter 13 bankruptcy<\/span> allows you to keep your property and repay debts through a court-supervised payment plan<\/span>. This plan lasts for three to five years, but requires a steady income. The main advantages of Chapter 13 bankruptcy<\/span> are that it stops foreclosure<\/span>, helps you catch up with missed mortgage or car payments, allows you to keep your home and vehicles, and protects co-signers. The main disadvantages of this type of bankruptcy<\/span> are that it involves a long repayment period, costs more than a Chapter 7, stays on your credit report<\/span> for seven years, and requires sufficient regular income<\/span> to fund your monthly plan payments.<\/p>\n\n <\/div>\n <\/div>\n<\/div>\n\n\n

Opting to file for bankruptcy is one of the hardest decisions you\u2019ll ever make. The already difficult choice is further complicated by determining which type of bankruptcy<\/span><\/a> will work best for you. Most people file for either Chapter 7 or Chapter 13 bankruptcy<\/span>. While both types of bankruptcy<\/span> offer debt relief<\/span>, there are pros and cons to both.<\/p>\n

For people who have substantial debt and assets, Chapter 13 may be the best option. Unlike a Chapter 7 liquidation<\/span> bankruptcy, a Chapter 13 <\/span>bankruptcy<\/span> case<\/span> allows you to keep your assets and enter a long-term repayment plan<\/span>.<\/p>\n

This article examines and explains how a Chapter 13 bankruptcy<\/span> works. It also discusses the advantages and disadvantages of choosing this type of bankruptcy<\/span>. If you\u2019re considering bankruptcy or have already filed your bankruptcy petition<\/span>, contact an experienced <\/span>bankruptcy attorney<\/span><\/a> to discuss your case. They\u2019ll help guide you through the bankruptcy proceedings and move you toward the fresh start<\/span> you so desperately need.<\/p>\n

How Does Chapter 13 Bankruptcy<\/span> Work?<\/h2>\n

Chapter 13 cases<\/span> work quite differently than Chapter 7 <\/span>bankruptcy<\/span> cases<\/span>. The primary difference between the two is that Chapter 7 is a liquidation<\/span> bankruptcy while Chapter 13 is more of a reorganization bankruptcy<\/span>.<\/p>\n

In a Chapter 7, the trustee sells the debtor\u2019s assets and uses the proceeds to pay off creditors. The bankruptcy court<\/span> discharges (eliminates) whatever debt you can\u2019t pay through the bankruptcy.<\/p>\n

For Chapter 13 <\/span>bankruptcy<\/span> cases<\/span>, the trustee negotiates a payment plan<\/span> with your creditors so that you can keep most, if not all, of your real and personal property. The payment plan<\/span> lasts anywhere from three to five years.<\/p>\n

By the end of your repayment plan<\/span>, you\u2019ll have paid your creditors either the entire amount you owed or an acceptable percentage of the total debt. The Chapter 13 trustee<\/span> confirms the amounts you will pay before the bankruptcy judge approves your proposed plan.<\/p>\n

Why File a Chapter 13 Bankruptcy<\/span>?<\/h2>\n

Why would a person elect to file a Chapter 13 bankruptcy<\/span> when they can file a Chapter 7? After all, wouldn\u2019t having a judge wipe out all of your debt be better than having to pay it all back? Plus, a repayment plan<\/span> will last for up to five years.<\/p>\n

Three to five years may seem like a long period of time<\/span>, but it\u2019s a small price to pay if it means you get to keep your prized assets. Filing a Chapter 13 bankruptcy<\/span> keeps the trustee from selling their assets to pay creditors.<\/p>\n

Chapter 13 filers<\/span> want to keep assets, such as their home, and are aware that their state\u2019s homestead exemption<\/span> will likely not cover the equity in their house. They also might want to keep their car and any other valuables they have.<\/p>\n

There are numerous benefits in choosing a Chapter 13 bankruptcy<\/span> instead of a Chapter 7, but there are disadvantages as well. Read on to learn the pros and the cons involved.<\/p>\n

Filing a Chapter 13 Bankruptcy<\/span>: The Basics<\/h2>\n

The Chapter 13 <\/span>bankruptcy<\/span> process<\/span> is a serious undertaking and should serve as a last resort for your financial situation<\/span>. Knowing what\u2019s involved and how it works can help clarify your options. Let\u2019s take a look at some of the most common questions about Chapter 13 bankruptcy<\/span>.<\/p>\n

How Long Does It Take To File for Chapter 13?<\/h3>\n

There\u2019s no set time for how long it will take to complete your Chapter 13 <\/span>bankruptcy<\/span>. Every case is unique. The more assets and debts you have, the longer it will take to work out an acceptable payment plan<\/span>.<\/p>\n

On average, a Chapter 13 bankruptcy<\/span> can take about five-and-a-half years to complete. This is assuming that your trustee approves a five-year Chapter 13 plan<\/span>. It also provides for two months to file your actual Chapter 13 petition, start your repayment plan<\/span>, and ultimately receive your bankruptcy discharge.<\/p>\n

How Much Does It Cost to File a Chapter 13 Bankruptcy<\/span>?<\/h3>\n

The filing fee is the same for everyone who files a Chapter 13 petition. The uniform filing fee is $313 (as of 2026). The amount you\u2019ll pay in attorney fees will vary. A Chapter 13 <\/span>bankruptcy<\/span> lawyer<\/span><\/a> will charge you an average of $3,000 to $4,500, depending on how complicated your case is.<\/p>\n

In addition to the above fees, you will also have to pay for some (or all) of the following requirements:<\/p>\n