Chapter 13 bankruptcy is one of the two most common forms of personal bankruptcy. Many people use Chapter 7 bankruptcy. This forms requires a means test to be passed. If you earn too much then you won’t qualify for Chapter 7. Chapter 13 is a great option for those who are looking to repay their debts under a new payment plan, and/or for those who are looking to protect significant assets from the bankruptcy process.

Repayment plans under Chapter 13 bankruptcy often last for three to five years. While under these repayment plans, the bankruptcy individual would be paying the trustee assigned to their bankruptcy, as opposed to directly paying his or her creditors. The trustee then distributes the money to the creditors.

These repayment plans can be very beneficial, as the filer will likely pay pennies on the dollar for whatever debt is owed. Once the repayment plan time period is up, any unpaid debts are discharged through the bankruptcy process. Chapter 13 also protects assets that can be exempted, such as homes and cars. Chapter 13 also prevents wage garnishment, so even if you have debts that can’t be discharged (such as student loan debt), chapter 13 can give you the breathing room you need to catch up on your debts.

As always, when going through any bankruptcy — but especially a Chapter 13 filing — it is important o have experienced legal counsel on your side. At McBride Law Firm, we can help people in Alexandria with their financial matters.



Due to precautions related to COVID-19, we have expanded our options for remote consultations. Please contact our office to discuss whether a full phone consultation or video conference is appropriate for your situation.

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