Last reviewed: 7 October 2026
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Chapter 13 bankruptcy, explained: eligibility, the plan and the discharge
Chapter 13 of the Bankruptcy Code provides for adjustment of the debts of an individual with regular income. It lets a debtor keep property and pay debts over time, usually three to five years.[1] This page walks through who can file, what happens after filing, how the repayment plan works, and what the discharge does and does not cover. It does not say whether Chapter 13 fits your situation.
The short version
- Who: an individual with regular income whose debts are under the limits in 11 U.S.C. § 109(e). For cases filed on or after 1 April 2025 those limits are $526,700 of noncontingent, liquidated unsecured debt and $1,580,125 of noncontingent, liquidated secured debt.[2][3]
- What you do: propose a plan and make payments, usually through a trustee, over three to five years. The U.S. Courts say that during this time the law forbids creditors from starting or continuing collection efforts.[1]
- How long: the plan length depends on your current monthly income compared with your state median. No plan may run longer than five years.[4][1]
- The discharge: it comes after you complete the plan payments, not when you file, and it has listed exceptions.[5][6]
- If payments stop: the court may dismiss the case or convert it to Chapter 7, for cause.[7]
Who can file
| Requirement | What the sources say |
|---|---|
| Regular income | Section 109(e) is limited to an individual with regular income (or an individual with regular income and the individual’s spouse), and it excludes a stockbroker or a commodity broker. Self-employed individuals and individuals with an unincorporated business are eligible if they meet the debt limits.[2][1] |
| Debt limits | The individual must owe, on the date of filing, noncontingent, liquidated, unsecured debts of less than $526,700 and noncontingent, liquidated, secured debts of less than $1,580,125. Those figures are the amounts adjusted effective 1 April 2025; adjustments do not apply to cases commenced before they take effect, and the next scheduled adjustment is 1 April 2028. For an individual and spouse filing together, the statute measures their debts in the aggregate.[2][3] |
| Prior dismissals | The U.S. Courts say an individual cannot file under any chapter if, during the preceding 180 days, a prior petition was dismissed for the debtor’s willful failure to appear or comply with court orders, or was voluntarily dismissed after creditors sought relief from the stay to recover property on which they hold liens.[1] |
| Credit counseling | The U.S. Courts say no individual may be a debtor unless, within 180 days before filing, the individual received credit counseling from an approved agency, with exceptions for emergencies and where the U.S. trustee (or bankruptcy administrator) has determined there are not enough approved agencies. See our guide to bankruptcy credit counseling and debtor education.[1] |
What happens after you file
The U.S. Courts describe the steps below. The timing figures are theirs, tied to the Bankruptcy Rules and the statute cited on their page, and the plan-payment start date is taken from the statute itself.
| Step | What happens |
|---|---|
| Petition and papers | The case begins by filing a petition with the bankruptcy court. Unless the court orders otherwise, the debtor must also file schedules of assets and liabilities, a schedule of current income and expenditures, a schedule of executory contracts and unexpired leases, and a statement of financial affairs, along with a certificate of credit counseling and other items listed on the U.S. Courts page.[1] |
| A trustee is appointed | Under section 1302, the U.S. trustee appoints a standing trustee or one disinterested person to serve as trustee in the case, or the U.S. trustee may serve as trustee. The U.S. Courts say the Chapter 13 trustee evaluates the case and serves as a disbursing agent, collecting payments from the debtor and distributing them to creditors.[8][1] |
| The automatic stay | Filing stops most collection actions against the debtor and the debtor’s property, with exceptions. See the automatic stay, explained. A separate stay protects some co-debtors; see co-signers and bankruptcy.[1] |
| The plan | Unless the court grants an extension, the debtor must file a repayment plan with the petition or within 14 days after it is filed. The plan must provide for fixed payments to the trustee on a regular basis, typically biweekly or monthly.[1] |
| Payments begin | Unless the court orders otherwise, the debtor must commence making payments not later than 30 days after the date of the filing of the plan or the order for relief, whichever is earlier. The trustee holds those payments until the court confirms or denies confirmation.[9] |
| Meeting of creditors | Between 21 and 50 days after filing (up to 60 days where the meeting is at a location without regular U.S. trustee or bankruptcy administrator staffing), the trustee holds a meeting of creditors, where the debtor is placed under oath and the trustee and creditors may ask questions. See the meeting of creditors, explained.[1] |
| Confirmation hearing | No later than 45 days after the meeting of creditors, the bankruptcy judge must hold a confirmation hearing and decide whether the plan is feasible and meets the standards for confirmation. Creditors get 28 days’ notice and may object.[1] |
| If the plan is not confirmed | The debtor may file a modified plan or convert the case to Chapter 7. If the court dismisses the case, the trustee must return remaining funds to the debtor, other than funds already disbursed or due to creditors, and the court may let the trustee keep some for costs.[1] |
How long the plan lasts
Section 1322(d) ties the maximum length to your current monthly income, with the debtor’s spouse included, multiplied by 12, compared with the median family income of your state for a household your size.[4]
- At or above the median: the plan may not provide for payments over a period longer than 5 years.[4]
- Below the median: the plan may not provide for payments over a period longer than 3 years, unless the court, for cause, approves a longer period, and the court may not approve a period longer than 5 years.[4]
Section 1325(b)(4) uses the same comparison for the “applicable commitment period”: 3 years, or not less than 5 years if income is at or above the median. The commitment period may be shorter only if the plan pays all allowed unsecured claims in full over a shorter period.[10] The U.S. Courts note that “current monthly income” is a defined term meaning the average monthly income received over the six calendar months before the case began.[1]
What the plan has to do
- Priority claims: section 1322(a)(2) requires full payment, in deferred cash payments, of all claims entitled to priority under section 507, unless the holder of a particular claim agrees to different treatment. Section 1322(a)(4) allows less than full payment of certain domestic support claims only if all projected disposable income for a five-year period is applied to the plan.[4] The U.S. Courts say priority claims include most taxes and the costs of the bankruptcy proceeding.[1]
- Secured claims: the U.S. Courts say that if the debtor wants to keep the collateral, the plan must provide that the holder receive at least the value of the collateral, and that some recent purchase-money debts, such as certain car loans, must be paid in full. They note that the home mortgage lender may be paid over the original loan schedule so long as any arrearage is made up during the plan, and that the debtor should consult an attorney about treatment of secured claims.[1]
- Unsecured claims: the plan need not pay them in full. Under section 1325(a)(4), each allowed unsecured claim must receive at least what it would receive if the estate were liquidated under Chapter 7. If the trustee or an unsecured creditor objects, section 1325(b)(1) requires either payment in full of that claim or that all projected disposable income for the applicable commitment period go to unsecured creditors under the plan.[10]
Section 1325(b)(2) defines “disposable income” as current monthly income (with listed exclusions) less amounts reasonably necessary to be expended for the support of the debtor or dependents, or for a domestic support obligation that first becomes payable after the petition, and for charitable contributions up to 15 percent of gross income. If the debtor is engaged in business, it also subtracts expenditures necessary to continue, preserve and operate the business, and for a debtor whose income is above the state median, section 1325(b)(3) says the reasonably necessary amounts (other than the charitable-contribution amount) are determined under section 707(b)(2)(A) and (B).[10]
Co-debtors
Section 1301(a) generally stops a creditor from acting, or starting or continuing a civil action, to collect all or part of a consumer debt of the debtor from an individual who is liable on the debt with the debtor, or who secured it. The U.S. Courts say this may protect co-signers.[11][1] The exceptions are covered in our co-signer guide.
If you cannot keep up the payments
A confirmed plan binds the debtor and each creditor.[1] Under section 1307(c), on request of a party in interest or the U.S. trustee and after notice and a hearing, the court may convert the case to Chapter 7 or dismiss it, whichever is in the best interests of creditors and the estate, for cause. The listed causes include unreasonable delay by the debtor that is prejudicial to creditors, failure to commence making timely payments under section 1326, and material default by the debtor with respect to a term of a confirmed plan.[7] The U.S. Courts add that the court may also dismiss or convert if the debtor fails to pay post-filing domestic support obligations or to make required tax filings.[1]
Two debtor rights are in the same section (and section 1307(f) bars converting a farmer’s case to Chapter 7, 11 or 12 unless the debtor requests it): the debtor may convert a Chapter 13 case to Chapter 7 at any time, and on the debtor’s request the court shall dismiss a Chapter 13 case if it has not been converted from another chapter. Waivers of those rights are unenforceable.[7]
The U.S. Courts also say that after a plan is confirmed, the plan may be modified at the request of the debtor, the trustee or an unsecured creditor, and that the debtor may not incur new debt without consulting the trustee, because additional debt may compromise the debtor’s ability to complete the plan.[1]
The discharge
Under section 1328(a), as soon as practicable after the debtor completes all plan payments, and after certifying that required domestic support payments due through the date of the certification have been paid, the court shall grant a discharge of all debts provided for by the plan or disallowed under section 502, unless the court approves a written waiver of discharge. Section 1328(a) lists exceptions. They are:[5]
- debts provided for under section 1322(b)(5), which covers cure of defaults and maintenance of payments on long-term debts;[5]
- debts of the kind specified in section 507(a)(8)(C) or in paragraph (1)(B), (1)(C), (2), (3), (4), (5), (8), or (9) of section 523(a);[5]
- debts for restitution, or a criminal fine, included in a sentence on the debtor’s conviction of a crime; and[5]
- debts for restitution, or damages, awarded in a civil action against the debtor as a result of willful or malicious injury by the debtor that caused personal injury to an individual or the death of an individual.[5]
This list covers the main conditions. Section 1328(h) adds that the court may not grant a discharge unless, after notice and a hearing held not more than 10 days before the order, it finds no reasonable cause to believe that section 522(q)(1) may apply to the debtor and that no proceeding is pending in which the debtor may be found guilty of a felony, or liable for a debt, of the kinds described in section 522(q)(1).[5] The U.S. Courts add that a Chapter 13 discharge requires, among other things, completion of an approved financial management course if one is available to the debtor, and that the debtor has not received a discharge in a prior case within the time frames they state (two years for a prior Chapter 13 case, four years for a prior Chapter 7, 11 or 12 case).[1] Our guide to debts a Chapter 7 discharge cannot erase explains the section 523 categories that section 1328(a) cross-refers to.
The hardship discharge
Under section 1328(b), at any time after confirmation and after notice and a hearing, the court may grant a discharge to a debtor who has not completed the payments only if all three of these are true:[5]
- the failure to complete payments is due to circumstances for which the debtor should not justly be held accountable;[5]
- each allowed unsecured claim has received at least what it would have received if the estate had been liquidated under Chapter 7 on the plan’s effective date; and[5]
- modifying the plan under section 1329 is not practicable.[5]
A hardship discharge reaches unsecured debts provided for by the plan or disallowed, except debts provided for under section 1322(b)(5) and debts of a kind specified in section 523(a).[5]
How this differs from Chapter 7
The U.S. Courts say Chapter 13 is different from Chapter 7 because the Chapter 13 debtor usually remains in possession of the property of the estate and pays creditors through the trustee based on anticipated income, and that unlike Chapter 7 the debtor does not receive an immediate discharge.[6] For the side-by-side comparison, see Chapter 7 vs. Chapter 13; for the income test that decides which one you may file, see the Chapter 7 means test.
What this page does not cover
It does not cover court fees, the forms, how your state’s exemptions apply, how a home mortgage or car loan would be treated in a specific plan, or how a case affects your credit report. The U.S. Courts themselves say the scope of the Chapter 13 discharge is complex and that debtors should consult competent legal counsel before filing.[1] This is general information, not legal advice. Our Standard checks companies; it does not review any court process.
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When we will update this page
We revisit it when the cited Bankruptcy Code sections or the U.S. Courts page change, and when the dollar limits are next adjusted (scheduled for 1 April 2028). Sources last read 7 October 2026.
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