Glossary
Chapter 13
Chapter 13 is the chapter of the U.S. Bankruptcy Code that lets an individual with regular income keep property and repay debts over time under a court-confirmed plan, commonly three to five years. It is limited to individuals — a corporation or partnership cannot be a Chapter 13 debtor. Debt limits also apply.
Key points
- Chapter 13 provides for the adjustment of debts of an individual with regular income, who keeps property and pays over time.
- Only individuals may file under Chapter 13; a self-employed person running an unincorporated business still may (11 U.S.C. § 1304).
- A Chapter 13 discharge generally comes after all payments called for by the plan have been made, not at filing.
- The court confirms a plan only when the conditions of 11 U.S.C. § 1325 are met, and the trustee or an unsecured creditor may object.
- Exemption amounts, median-income figures and local practice vary by state and district.
If "Chapter 13" turned up in a court notice, a letter, or something said quickly in a meeting, it has a narrow and specific meaning. It names one chapter of the federal Bankruptcy Code: the repayment chapter for individuals. Here is what the term means, how a case runs, and what people most often misread.
What does Chapter 13 mean?
Chapter 13 is one chapter of the Bankruptcy Code, the federal law at Title 11 of the United States Code. It provides for the adjustment of debts of an individual with regular income: the debtor keeps property and pays all or part of what is owed over time, usually three to five years (Bankruptcy Administrator for the Eastern District of North Carolina, Chapter 13). Courts and lawyers sometimes call it a wage earner's plan.
Chapter 13 is limited to individuals. A corporation or partnership cannot be a Chapter 13 debtor, while an individual who is self-employed or operates an unincorporated business can be (11 U.S.C. § 1304). Who may be a debtor under each chapter is set by 11 U.S.C. § 109, which also caps the noncontingent, liquidated debt a Chapter 13 debtor may owe. Those debt limits are adjusted periodically, so a figure in an older guide may no longer be current.
Why does the chapter matter in a bankruptcy case?
The chapter decides the shape of the case. Chapter 7 is the liquidation chapter; Chapter 13 is the repayment chapter, and the difference shows up in what happens to property and when a discharge arrives. In a Chapter 13 case the discharge is granted only after the debtor completes all payments called for by the plan (U.S. Bankr. Ct. D. Ariz., Choosing Your Chapter). That timing is also why people behind on a mortgage look at Chapter 13: a plan may provide for curing a default while payments continue (11 U.S.C. § 1322).
Chapter 13 also carries something Chapter 7 does not. After the order for relief, a creditor generally may not act to collect a consumer debt of the debtor from a co-signer, subject to stated exceptions (11 U.S.C. § 1301). A Chapter 7 case may be converted to Chapter 13 with the debtor's consent (11 U.S.C. § 707).
| Question | Chapter 7 | Chapter 13 |
|---|---|---|
| What is it | Liquidation chapter | Repayment chapter |
| Who may be a debtor | Individuals and many entities | Individuals with regular income only |
| When a discharge arrives | After the deadline for objections passes | After all plan payments are completed |
How does a Chapter 13 case work in practice?
Before filing, an individual must complete a credit counseling course with an approved provider within the 180 days before the case is filed (Bankr. W.D. La. official page — CHAPTER 13 CASE TIMELINE). Providers are approved by the U.S. Trustee Program, or by the Bankruptcy Administrator in Alabama and North Carolina. The case begins when the petition is filed; the schedules, statements and the Chapter 13 plan follow, either with the petition or on the deadline the court's checklist sets (Bankr. N.D. Iowa official page — Chapter 13 Filing Requirements).
The statutory filing fee is $235 (28 U.S.C. § 1930(a)(1)(B)), plus a $78 administrative fee (Bankruptcy Court Miscellaneous Fee Schedule, Item 8); courts commonly collect them together and may allow installments. A standing trustee — appointed by the U.S. Trustee, or the Bankruptcy Administrator in Alabama and North Carolina — collects plan payments and distributes them (11 U.S.C. § 1302). The court then holds a confirmation hearing.
What do people get wrong about Chapter 13?
First, filing does not by itself wipe out a lien. A discharge releases personal liability on dischargeable debts, but where a valid lien such as a mortgage was not eliminated in the case, the creditor may still enforce it against the property afterward (U.S. Bankr. Ct. M.D. Ala., Consumer Pro Se Debtors Guide). Exemptions shield equity; they do not erase a secured claim.
Second, plan length is not a fixed term. Plans commonly run three to five years, and current monthly income measured against the applicable state median generally drives which applies — but the commitment period ends earlier where the plan pays all allowed unsecured claims in full (11 U.S.C. § 1325).
Third, confirmation is not automatic. The trustee or an unsecured creditor may object, and the court confirms only when the statutory conditions are met (11 U.S.C. § 1325). Some debts are not discharged at all (11 U.S.C. § 523).
Frequently asked questions
- Does filing Chapter 13 stop collection activity?
- Filing a petition generally stays most collection actions against the debtor and the debtor's property, including lawsuits, wage garnishments and collection calls (Bankr. D. Md. official page — Legal Overview). It is not unlimited. Certain actions are not stayed, and where more than one bankruptcy petition was filed within the past year, the stay may be limited (North Carolina Eastern Pro Se Bankruptcy Guide).
- What does it cost to file a Chapter 13 case?
- The court charges a statutory filing fee of $235 (28 U.S.C. § 1930(a)(1)(B)) plus a $78 administrative fee (Bankruptcy Court Miscellaneous Fee Schedule, Item 8). Many courts collect these together and allow an individual to apply to pay in installments. Attorney fees are separate and vary widely by district and by the complexity of the case.
- Can a business file under Chapter 13?
- No. A corporation or partnership cannot be a Chapter 13 debtor. Chapter 13 is for an individual with regular income, and 11 U.S.C. § 109 sets who may be a debtor under each chapter. An individual who is self-employed or operates an unincorporated business is treated as a debtor engaged in business and may still use Chapter 13 (11 U.S.C. § 1304).
Sources
- 11 U.S.C. § 109 — Who may be a debtor · official source
- 11 U.S.C. § 1304 — Debtor engaged in business · official source
- 11 U.S.C. § 1301 — Stay of action against codebtor · official source
- 11 U.S.C. § 1302 — Trustee · official source
- 11 U.S.C. § 1322 — Contents of plan · official source
- 11 U.S.C. § 1325 — Confirmation of plan · official source
- 11 U.S.C. § 523 — Exceptions to discharge · official source
- 11 U.S.C. § 707 — Dismissal of a case or conversion to a case under chapter 11 or 13 · official source
- 28 U.S.C. § 1930(a)(1)(B) · official source
- Bankruptcy Court Miscellaneous Fee Schedule, Item 8
- Bankruptcy Administrator for the Eastern District of North Carolina, Chapter 13
- U.S. Bankr. Ct. D. Ariz., Choosing Your Chapter: What can Bankruptcy do for you? What will it do to you?
- Bankr. W.D. La. official page — CHAPTER 13 CASE TIMELINE
- Bankr. N.D. Iowa official page — Chapter 13 Filing Requirements
- U.S. Bankr. Ct. M.D. Ala., Consumer Pro Se Debtors Guide
- Bankr. D. Md. official page — Legal Overview
- North Carolina Eastern Pro Se Bankruptcy Guide (September 2025)
By Antonio G. Jimenez, Esq. · Florida Bar No. 21022
Sources verified July 28, 2026 · How we verify
Every figure on this page is drawn from a primary legal source and checked against our canonical legal database before publication. Bankruptcy.law is not a law firm and does not provide legal advice.