Filing for bankruptcy doesn’t necessarily mean you’ve ruined your financial future; even in bankruptcy, there’s still an opportunity to get back on your feet and start fresh. If your current debts are overwhelming but you have adequate income to repay your creditors, filing for Chapter 13 bankruptcy may be in your best interest. Read on to learn what you need to know about the Chapter 13 bankruptcy process from Ron Lunquist, Attorney at Law.


What Is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy, also referred to as Wage Earner’s Bankruptcy, is designed to allow individuals with regular income to repay either a portion or all of their debts.


As an alternative to liquidation bankruptcy (Chapter 7), Chapter 13 is best suited to those who struggle to meet their creditors’ immediate demands. When you file for Chapter 13, you agree to repay your creditors over a three- to five-year period using your discretionary income. As such, this type of bankruptcy is not designed for individuals who do not have sufficient income to repay their debts.


Eligibility Requirements to File for Chapter 13

Before you can file for Chapter 13 bankruptcy, you must meet the following requirements:


●        Your secured and unsecured debts cannot exceed specific amounts.

●        You have steady income and can prove to the court that you are capable of repaying your debts and meeting your other financial obligations.

●        You have not filed for bankruptcy and been dismissed in the past 180 days.

●        You have completed credit counseling from an approved agency within 180 days before filing. 

●        You are not a business.


For further details on Chapter 13 eligibility, check out


Advantages of Filing for Chapter 13

While many individuals are worried about losing property as a result of filing for bankruptcy, in reality, property loss isn’t very common. That’s one of the primary advantages of filing for Chapter 13 — it allows you to protect property that you may be required to give up in liquidation bankruptcy. Other advantages of Chapter 13 include:


●        Trustees may be flexible on the terms of your repayment plan.

●        Your payments are determined by your budget, which allows you to pay what you can afford.

●        Once you complete your repayment plan as agreed, individual creditors cannot require you to pay them in full. When you finish your payment plan, the remainder of your debt is discharged.

●        Your attorney can help you build a plan that allows you to reorganize or defer loan payments until you have adequate income to make payments.

●        Filing for Chapter 13 will prevent further interest accrual on your dischargeable debts.

●        Chapter 13 stops foreclosures and repossessions, and lets you pay back missed payments over time.

●        Chapter 13 takes care of tax debt and other non dischargeable debt that Chapter 7 does not take care of.


Essentially, Chapter 13 provides the most powerful debt repayment plan available to you. Though filing for bankruptcy has negative repercussions on your credit, so do numerous missed payments, defaults, and repossessions. Rather than allowing negative marks to accumulate on your credit report, filing for Chapter 13 bankruptcy can potentially help you begin improving your credit right away.


Considering Bankruptcy? Contact Ron Lundquist, Attorney at Law

If your debts are overwhelming and you’re struggling to keep up with your payments, you have options, and Ron Lundquist, Attorney at Law can help you understand them. For over 20 years, I’ve proudly served the legal needs of Twin Cities residents, and when you need bankruptcy expertise you can trust, I’m here for you too. To schedule a free consultation or learn more about how my team can help you, please call my office today at 651-5454-0007 or connect with us online.