Last Updated: July 2026
Chapter 13 Bankruptcy: Save Your Home from Foreclosure
Chapter 13 bankruptcy — commonly called a "wage earner's plan" — offers individuals with regular income a powerful tool to reorganize debts and repay them over a period of three to five years. Unlike Chapter 7 bankruptcy, which often requires liquidating assets, Chapter 13 emphasizes repayment through a court-approved plan without forcing the sale of your home or other valuable property. Its most critical benefit for homeowners is that it allows you to cure mortgage arrears and save your home from foreclosure.
In 2025, there were 207,889 Chapter 13 filings nationwide, a 5.4% increase from 2024.1 This upward trend continues into 2026, reflecting more Americans choosing Chapter 13 as a strategy to protect their homes and stabilize their finances.
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is a court-supervised repayment plan designed for individuals with steady income who want to keep their assets while paying off debts. Instead of wiping out debts immediately, Chapter 13 allows you to catch up on overdue payments, especially mortgage arrears, over a period of three to five years.
Key Features of Chapter 13 Bankruptcy
- Allows you to keep your home and other assets
- Stops foreclosure and other creditor actions immediately
- Creates a structured repayment plan based on your income
- Discharges eligible debts at the end of the plan
- Requires consistent income to fund the repayment plan
For more information on how Chapter 13 works in your state, check out our STATE_NAME Bankruptcy Attorneys page or visit your local CITY_NAME Bankruptcy Attorneys.
Understanding the Automatic Stay: Your First Line of Defense Against Foreclosure
One of the most immediate and powerful protections provided by filing Chapter 13 bankruptcy is the automatic stay. Under 11 U.S.C. § 362, this legal injunction halts most creditor actions as soon as your bankruptcy petition is filed.
What the Automatic Stay Stops
- Foreclosure sales and proceedings
- Wage garnishments affecting your paycheck
- Lawsuits and creditor collection calls
- Repossessions of vehicles and other property
- Utility service disconnections for up to 20 days without court approval
For example, if your home was scheduled for a foreclosure sale tomorrow, filing Chapter 13 today can immediately stop that sale, giving you time to propose a repayment plan to catch up on missed mortgage payments over the plan's duration.
Learn more about the protections offered by the automatic stay in our Automatic Stay Guide.
How the Chapter 13 Repayment Plan Works
After filing your Chapter 13 petition, you must submit a proposed repayment plan within 14 days. This plan outlines how you intend to repay your debts over three to five years.
Key Components of the Repayment Plan
- Priority debts: Must be paid in full, including taxes and domestic support obligations
- Mortgage arrears: Can be cured by paying overdue amounts over the plan period
- Ongoing mortgage payments: Must be made directly or through the trustee during the plan
- Unsecured creditors: Must receive at least as much as they would in a Chapter 7 liquidation
- Disposable income: All excess income after expenses goes toward repaying creditors
Duration of the Plan
The length depends on your income relative to your state's median:
- If income is below the state median, the plan lasts 3 years.
- If income is above the median, the plan lasts 5 years.
Once confirmed by the court, the plan binds all creditors, preventing them from pursuing collection outside the bankruptcy process.
For a comprehensive breakdown, visit our Chapter 13 Guide.
Updated 2026 Bankruptcy Filing Fees
Bankruptcy filing fees are an important consideration when deciding whether to file. As of 2026, the fees are:
- Chapter 7 filing fee: $338
- Chapter 13 filing fee: $313
These fees may change, so confirm current amounts with your attorney or the court clerk. For additional information on fees and expenses, see our detailed Bankruptcy Costs Guide.
Chapter 13 Debt Limits and Eligibility in 2026
Thanks to the Small Business Reorganization Act of 2019, the traditional debt limits for Chapter 13 no longer apply. This means individuals can file Chapter 13 regardless of the amount of secured or unsecured debt.
| Debt Type | 2026 Limit | Notes |
|---|---|---|
| Secured debts (mortgages, car loans) | No limit | Allows large secured debts like home mortgages to be included |
| Unsecured debts (credit cards, medical bills) | No limit | All unsecured debts can be reorganized |
However, courts will still evaluate repayment plans for feasibility and good faith.
Chapter 13 vs. Chapter 7 Bankruptcy: Which is Right for You?
Choosing between Chapter 13 and Chapter 7 bankruptcy depends on your financial situation, goals, and asset protection needs.
| Factor | Chapter 7 | Chapter 13 |
|---|---|---|
| Timeline | 3–6 months | 3–5 years |
| Asset Protection | Only exempt assets protected | Keep all assets, including non-exempt property |
| Mortgage Arrears | Cannot cure arrears; foreclosure likely | Can cure arrears and save your home |
| Income Requirements | Must pass means test | Must have regular income |
| Debt Discharge | Some debts non-dischargeable | Can pay some non-dischargeable debts through the plan |
| Credit Report Impact | Remains for 10 years | Remains for 7 years |
To explore Chapter 7 bankruptcy in detail, visit our Chapter 7 Complete Guide.
The Chapter 13 Discharge: Debts You Can Eliminate
Upon successful completion of your Chapter 13 plan, the court will issue a discharge freeing you from personal liability for many remaining unsecured debts.
Debts Typically Discharged in Chapter 13
- Debts from property settlements in divorce (excluding support payments)
- Certain tax debts paid through the plan
- Debts from willful and malicious injury to property (excluding bodily injury)
- Credit card debts, medical bills, and personal loans
This discharge helps provide a fresh financial start and can improve your credit over time.
Success Rates and Tips for Completing Chapter 13
Completing a Chapter 13 repayment plan can be challenging. National statistics show only about 33–40% of filers successfully complete their plans.3 However, working with an experienced bankruptcy attorney can significantly increase your chances of success.
Strategies to Increase Your Chances of Completion
- Consult a qualified bankruptcy attorney early in the process
- Provide full and honest financial disclosures
- Strictly adhere to your budget and repayment schedule
- Maintain open communication with your bankruptcy trustee and attorney
- Notify your attorney immediately of any income changes or financial difficulties
Protecting Yourself From Wage Garnishment Through Bankruptcy
Before filing, creditors may garnish your wages to collect debts, sometimes leaving you with insufficient income for living expenses. Filing Chapter 13 triggers the automatic stay, which immediately stops wage garnishment.
Understand your rights and protections related to wage garnishment by reading our Wage Garnishment Guide.
State-Specific Bankruptcy Exemptions and How They Affect Your Case
Bankruptcy exemptions determine what property you can keep during bankruptcy, which varies significantly by state.
Explore your state's exemption rules to understand your protections:
- STATE_NAME Exemptions Guide
- Consult local STATE_NAME Bankruptcy Attorneys for personalized advice
- Review local court rules and exemption amounts
- Consider how exemptions impact your repayment plan and asset protection
Frequently Asked Questions About Chapter 13 Bankruptcy
Can Chapter 13 Bankruptcy Stop a Foreclosure Immediately?
Yes. Filing Chapter 13 immediately triggers an automatic stay that halts foreclosure proceedings and sales, giving you time to catch up on missed mortgage payments through your repayment plan.
How Long Does Chapter 13 Bankruptcy Last?
Typically, plans last between 3 and 5 years depending on your income compared to your state's median income.
What Happens If I Miss a Payment Under My Chapter 13 Plan?
Missing payments can jeopardize your case and lead to dismissal or conversion to Chapter 7. It’s critical to communicate with your attorney and trustee if you encounter financial difficulties.
Can I Keep My Car and Other Property in Chapter 13?
Yes. Chapter 13 allows you to keep your property, including non-exempt assets, as long as you continue making payments under your plan.
Is Chapter 13 Bankruptcy Right for Me?
If you have regular income and want to keep your home or other assets while repaying debts, Chapter 13 may be the best option. Consult with a bankruptcy attorney to evaluate your situation.
Additional Resources and State-Specific Legal Assistance
- STATE_NAME Bankruptcy Attorneys
- CITY_NAME Bankruptcy Attorneys
- STATE_NAME Exemptions Guide
- Chapter 13 Guide
- Bankruptcy Costs Guide
- Automatic Stay Guide
- Wage Garnishment Guide
Summary: Why Chapter 13 May Be Your Best Option to Save Your Home
Chapter 13 bankruptcy offers a structured way to save your home from foreclosure by:
- Stopping foreclosure immediately with the automatic stay
- Allowing you to cure mortgage arrears over a manageable period
- Protecting your property and assets during repayment
- Providing a discharge of eligible debts at plan completion
- Helping you regain control of your finances and credit
Consult with experienced bankruptcy attorneys to discuss your options and start the process of protecting your home today.
