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Chapter 13 Bankruptcy: Frequently Asked Questions

As part of our debt relief practice, our job is to set your mind at ease about all your bankruptcy-related questions. These are some of the most common inquiries we receive at Feinman Law Offices about Chapter 13 bankruptcy. However, this list is far from exhaustive. If you have additional questions, please get in touch for a free evaluation. You can reach our office by email, or else by phone: 978-494-6669.

Based in Andover, Massachusetts, we serve clients in northeastern Massachusetts and southern New Hampshire.

Am I eligible to file Chapter 13 bankruptcy?

Bankruptcy eligibility depends on your available income and your total amount of debt. If your total debt is too high, Chapter 13 is not an option. If your income is low enough, you will have the option of filing for Chapter 7 instead. Our attorneys offer a free evaluation to help make this determination.

What kind of debt can I discharge through Chapter 13?

In general, Chapter 13 bankruptcy can discharge the same kinds of debt as Chapter 7, plus a few additional kinds. These include:

  • Debt from credit cards
  • Medical expenses
  • Personal loans
  • Utility bills

The following debts are not discharged in Chapter 7, but are under Chapter 13:

  • Marital debt from divorce or separation
  • Post-bankruptcy association fees for a condominium or homeowner’s group
  • Debts borrowed against a retirement plan
  • Nondischargeable debt from a previous bankruptcy filing

Are there kinds of debt that I can’t discharge through Chapter 13?

Yes. While many debts are dischargeable under Chapter 13, not all of them are. Debts that will persist through Chapter 13 include:

  • Student loans
  • Child support
  • Government fines
  • Recent tax debt
  • Court judgments against you for DUI, willful negligence or malicious behavior

Which kind of bankruptcy is more beneficial: Chapter 7 or Chapter 13?

We will perform a full financial analysis to determine your bankruptcy eligibility. However, if you do qualify for both Chapter 7 and Chapter 13, which one you pick depends on your financial goals.

Chapter 7 filings finish more quickly, which allows you to get a fresh start and move on. However, you will also be required to sell more of your assets, which is why Chapter 7 is often called “liquidation” bankruptcy.

In Chapter 13 — a “reorganization” bankruptcy — you will pay back more of your debt over a longer period of time. In return, you will also be allowed to keep a greater portion of your assets and have less impact on your credit report. During our free bankruptcy evaluation, our lawyers will walk you through the differences in greater detail.

Is it easier to keep my house under Chapter 13 bankruptcy?

Yes. Chapter 13 is a so-called “reorganization” bankruptcy filing, so it typically does not require you to divest your personal assets. Under Chapter 13, you are allowed to create a repayment plan that allows you to catch up on any past mortgage payments you may have missed. Modifying the mortgage is also possible in certain cases.

How long does Chapter 13 take?

This is one of the key differences between Chapter 13 and Chapter 7 bankruptcy filings. While Chapter 7 is over in a matter of months, a Chapter 13 repayment plan typically takes three to five years to complete. However, you will be allowed to keep more of your assets.

Is my business eligible to file Chapter 13?

No. Chapter 13 bankruptcy is only for private individuals. Businesses require separate bankruptcy proceedings.

What is the credit report impact for filing Chapter 13?

A Chapter 13 bankruptcy filing will remain on your credit report for seven years. However, this is shorter than a Chapter 7 filing, which would be reflected for 10 years.

Keep in mind that you can still improve your credit even while a bankruptcy filing is on your record. With careful financial management and sound practices, your score can increase steadily after only a few years.

If you are an individual with primarily household or consumer debts, pursuant to the provisions of 11 U.S.C. §528(a)(4) of the Bankruptcy Code, as amended, you should be advised that this office may be considered to be a “debt relief agency” in that this office provides assistance to individuals to file bankruptcy to seek relief pursuant to the provisions of the Bankruptcy Code.