Chapter 13 is referred to as a wage earner plan, debt reorganization or debt consolidation. Chapter 13 is often utilized to stop repossessions and foreclosures, but can also effectively reorganize your debt load by lumping all of your monthly bills into one monthly payment.


  • immediately stops foreclosures and repossessions
  • is a valuable tool for consumers who have fallen behind on mortgage or car payments as it allows you time to catch up delinquencies
  • immediately stops levies, judgments and garnishments
  • immediately stops creditor harassment and even contact from creditors
  • may allow you to strip a second lien
  • may allow you to “cram down” the amount owed on certain assets to fair market value
  • may change the interest rate paid on certain debts
  • is a valuable tool for consumers wishing to consolidate their bills at a lower interest rate
  • is a valuable tool for consumers who are facing difficulties with the IRS


Additionally, if a debtor does not qualify for a Chapter 7, a Chapter 13 can be beneficial in restructuring debt to a manageable payment by eliminating or reducing interest. In a Chapter 13, the debtor(s) propose a plan of reorganization to repay creditors all or a portion of the debt owed. Some debt will be repaid in full and depending on circumstances; some creditors may receive only a partial payment of the debt. Some debts are paid interest and some are not. The plan may last from three to five years, depending on your specific circumstances. It is important to consult an experienced attorney to determine if you qualify for Chapter 13 and to explain how a repayment plan would be fashioned for your specific circumstances.


Filing a Chapter 13 can be complicated process and it is important to have a knowledgeable attorney to represent your interests.


The amount paid to creditors is dependent on several factors including type of debt, amount of debt, assets and disposable income of debtor(s). Chapter 13 permits you to keep your property by repaying creditors out of your future income. After completion of your payments under the plan, Chapter 13 debtors receive a discharge of most debts.

An individual, a married couple or small, unincorporated businesses who qualify may file Chapter 13. Debtors must have regular income and secured debt of less than $1,184,200.00 and non-contingent, liquidated unsecured debt of less than $394,725.00 (these limits are scheduled to increase April 1, 2019).

If you or your business in Texas needs the assistance of an experienced Houston Bankruptcy Attorney call The Fealy Law Firm, P.C. today at 866-751-1087, or complete the contact form provided on this site to schedule your free consultation.