Quinn Law Firm - Attorney

call Us Today


How does a Chapter 13 Bankruptcy's repayment plan work?

If you are considering filing for bankruptcy, you may already know that there are two primary avenues: Chapter 7 and Chapter 13. While Chapter 7 discharges certain debts in full, Chapter 13 creates a repayment plan so that you can pay off your debts within a five-year window of time.

However, you may think that it sounds impossible to pay off your debts. So how would Chapter 13's repayment system actually work?

The repayment plan's structure

If you file for Chapter 13 bankruptcy, your debts are reorganized into a three-to-five-year repayment plan. Your obligation is simplified into a single, reoccurring payment, usually monthly. You would either pay a trustee or have the money taken directly from your paycheck. The trustee then distributes the funds to your actual creditors.

You may not have to pay your debts in full

As your plan is created, some of your debts may be negotiated down to only a portion of what you were originally responsible for paying. Your creditors understand that it is better to receive a portion of their owed credit than nothing at all. This also makes it possible for you to afford your regular payments.

However, once your repayment plan is set, you are obligated to meet all of your payments. If you fail to do so, your bankruptcy plan may be dissolved in entirety.

Some debts are prioritized over others

As previously stated, some debts may be negotiated down. However, this is not possible for all types of debt. Items such as student loans, taxes and child support payments must be made in full. You must also keep up with your mortgage and car payments to retain your property.

Chapter 13 is not the right solution for everyone

No one debt solution perfectly meets the needs of every individual or family. Chapter 13 bankruptcy, for example, is only an option for individuals with a regular income. This ensures that they can meet their required payments.

If you are unsure which debt relief solution is right for you, you can discuss your choices with a Quinn Law Firm bankruptcy attorney. They can evaluate your options and explain which one can best meet your needs given your unique situation. To schedule a free consultation, contact us at 814-833-2222.

No Comments

Leave a comment
Comment Information
Request A Consultation

Learn More At A Consultation

Put our experience and skills to work for you today by contacting us online or by calling our office in Erie at 814-806-2518.

  • Quinn Law Firm A tradition of trust
  • erie's Choice Readers Poll Finalist 2018

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Quinn Law Firm
2222 West Grandview Boulevard
Erie, Pennsylvania 16506

Toll Free: 866-641-8996
Phone: 814-806-2518
Fax: 814-833-6753
Map & Directions