Chapter 13 Bankruptcy in DC, Maryland & Virginia

Chapter 13 is a reorganization bankruptcy that allows you to keep your property while repaying some or all of your debts through a structured three-to-five-year court-approved plan. It is sometimes called “wage earner bankruptcy” because it requires a regular income to fund the plan. Chapter 7, by contrast, is a liquidation bankruptcy that eliminates most unsecured debts quickly, typically within three to six months, but does not include a repayment plan and may involve surrendering non-exempt assets. Chapter 13 is the better choice if you are behind on a mortgage and want to save your home, if you have assets you want to protect that might not be fully covered by exemptions in a Chapter 7 case, or if your income is too high to qualify for Chapter 7 under the bankruptcy means test. A highly proficient bankruptcy attorney will help you understand which chapter is the right fit for your situation during your free consultation.

Yes. Stopping foreclosure is one of the most powerful things Chapter 13 can do, and it is one of the primary reasons homeowners in financial distress choose this option. The moment your Chapter 13 petition is filed with the bankruptcy court, the automatic stay immediately prohibits your mortgage lender from proceeding with any foreclosure action, including a scheduled auction. Through your Chapter 13 repayment plan, you then have three to five years to catch up on the mortgage arrears, the missed payments that triggered the foreclosure, while continuing to make your regular ongoing mortgage payments. As long as you complete the plan, you keep your home. Chapter 13 also gives you the option to pursue a loan modification with your lender, or to sell the property on your own schedule rather than losing it at auction. If you are facing foreclosure and wondering how to stop it, call me as soon as possible.

Your Chapter 13 monthly plan payment is based on your disposable income: what remains after subtracting your reasonable and necessary living expenses from your monthly take-home pay. It is not based on your total debt balance, which means many people are genuinely surprised by how affordable their plan payment turns out to be. The plan must also pay certain priority debts in full, such as mortgage arrears, car loan arrears, and certain taxes, but unsecured creditors like credit card companies and medical providers typically receive only a fraction of what they are owed, or sometimes nothing at all. I’ll fight to minimize your plan payment and structure your case to protect your most important assets while keeping your monthly obligation within your actual budget. Every case is different, which is why I encourage you to call for a free consultation. I’ll give you a realistic picture of what your plan payment might look like before you ever commit to anything.

No. Protecting your property is the entire point of Chapter 13. Unlike Chapter 7, which can involve the liquidation of non-exempt assets, Chapter 13 allows you to keep everything you own as long as you successfully complete your repayment plan. Your home, your vehicle, your retirement accounts, your household goods: all of it stays with you. In fact, if you are behind on a car loan and facing repossession, Chapter 13 can not only stop the repossession immediately through the automatic stay, but it can also allow you to catch up on the missed payments over time through your plan. In some cases, it may even be possible to reduce the principal balance owed on a vehicle loan to the car’s current market value, a process called a “cramdown,” if the loan meets certain age requirements. Most of my Chapter 13 clients complete their plans and come out the other side with their property intact.

At the successful completion of your Chapter 13 repayment plan, all remaining eligible debts are legally discharged, meaning they are permanently wiped out, regardless of how much of the original balance was actually paid during the plan. Debts that are typically discharged at the end of Chapter 13 include credit card balances, medical bills, personal loans, utility arrears, civil judgments, and certain older tax liabilities. The Chapter 13 discharge is actually broader in some respects than the Chapter 7 discharge, covering a few additional categories of debt. Some debts are simply not dischargeable under bankruptcy law, including most student loans, current child support and alimony obligations, recent income tax debts, and debts arising from fraud. I’ll walk you through exactly which of your debts will and will not be discharged so you can enter your plan with a clear understanding of where you will stand at the finish line

Yes. In fact, Chapter 13 is specifically designed to serve higher-income individuals who do not qualify for Chapter 7 under the bankruptcy means test. While Chapter 7 has income limits that disqualify many working professionals and two-income households, Chapter 13 has no income ceiling. As long as you have a regular source of income, whether from employment, self-employment, rental income, pension, Social Security, or another consistent source, and your secured and unsecured debts fall within the statutory debt limits, you may be eligible for Chapter 13. The higher your income, the larger your disposable income for plan purposes may be, but you also get to keep all of your property and enjoy the full suite of Chapter 13 protections. I work with clients across a wide income range, and I’ll quickly determine your eligibility and the best structure for your case.

A Chapter 13 repayment plan lasts either three or five years depending on your income relative to the median income in your state. If your income is below the median, a three-year plan is typically available; if it is above the median, a five-year plan is generally required. Throughout the plan period, you make monthly payments to the bankruptcy trustee, who distributes funds to your creditors according to the plan’s priority structure. During this entire time, the automatic stay remains in place, protecting you from new collection actions. Once you have made all required plan payments, the court will grant you a discharge of all remaining eligible debts, and the case is closed. At that point, you are legally free of those obligations and can begin rebuilding your credit and your financial life from a solid foundation. Many of my clients describe the end of their Chapter 13 plan as life-changing. 

Getting started is simple: call me to schedule a free, confidential Chapter 13 consultation. There is no obligation, no pressure, and no cost for the initial consultation. During that meeting I’ll review your income, debts, assets, and goals, explain your options in plain language, and give you an honest assessment of what a Chapter 13 plan would look like for your specific situation. As for attorney fees, Chapter 13 fees are typically subject to court approval and are often paid in part through your monthly plan payment, meaning that most clients need not come up with the full fee upfront before their case is filed. This makes Chapter 13 one of the most accessible forms of legal debt relief available. I price my services fairly and transparently. Do not let concerns about cost prevent you from getting the help you deserve. Call me today.