Chapter 13 can give people with regular income a way to repay some or all of their debts through a court-approved plan. It is often considered by people who want time to catch up on a mortgage or car payment, protect property, or create a structured path forward. Eligibility is personal, but the basics are straightforward.
Chapter 13 eligibility at a glance
Chapter 13 is available to an individual, including someone who is self-employed or operating an unincorporated business, who has regular income and meets the federal debt limits. A proposed repayment plan also needs to be realistic for the household budget. A bankruptcy attorney can advise how these rules apply to a particular case.
- Regular income: You need income that can support a repayment plan. Income may come from work, self-employment, retirement, support payments, or another dependable source.
- Debt limits: For cases filed now, unsecured debts must be below $526,700 and secured debts below $1,580,125. The U.S. Courts updates these figures periodically, so check the current official guidance before filing.
- Credit counseling: Most people must complete approved credit counseling during the 180 days before filing. Limited exceptions can apply.
- Recent case history: A prior case dismissed in the preceding 180 days for certain reasons can prevent a new filing during that period.
The U.S. Courts' Chapter 13 overview is the best starting point for the current federal rules and debt limits.
What does “regular income” mean?
Regular income does not mean every household has the same job or pay schedule. The practical question is whether there is dependable income to make the plan payments after reasonable living expenses. Wages, self-employment income, pensions, and some other recurring income can matter.
Chapter 13 does not use one universal minimum-income number. Instead, the court looks at whether the proposed plan is feasible. Gathering recent pay records, proof of other income, a monthly budget, and a full debt list can make that conversation clearer.
How do the Chapter 13 debt limits work?
The law treats secured and unsecured debt separately. A secured debt is backed by property, such as a home loan or vehicle loan. Unsecured debt can include credit cards, medical bills, and personal loans. The limits apply to noncontingent, liquidated debts as of the filing date.
The current figures are $526,700 for unsecured debt and $1,580,125 for secured debt. Because the limits change over time and debt classification can be complicated, do not rely on an old article or a rough estimate when deciding whether Chapter 13 is available.
What does a Chapter 13 repayment plan need to show?
A Chapter 13 plan generally runs for three to five years. It explains how payments will be made and how different debts will be treated. The plan must fit the person’s income and expenses, and it is subject to review by the trustee and the court.
Income can affect the plan length and the amount available for creditors. The U.S. Trustee Program's means-testing information explains the current data used with the bankruptcy forms. That information is a starting point, not a substitute for advice about an individual case.
When might someone be unable to file Chapter 13?
Common issues include debt above the federal limits, no reliable way to fund a proposed plan, missing the required credit counseling, or a recent case dismissal that triggers the 180-day filing restriction. The facts and timing matter. People with debt above the Chapter 13 limits may need to discuss other options with an attorney.
What to gather before exploring Chapter 13
- Recent proof of income and a list of monthly household expenses
- A complete list of creditors, balances, and collection notices
- Mortgage, car-loan, and other secured-debt statements
- Recent tax returns and any prior bankruptcy paperwork
- Questions about property, missed payments, and the goals you want a plan to address
If you are still comparing paths, use the Chapter 7 versus Chapter 13 guide for general education. If you need advice about eligibility, deadlines, property, or a specific repayment plan, request an attorney consultation.
Bankruptcy Pilot provides educational information, not legal advice or representation. Bankruptcy rules, local practice, and financial circumstances can affect eligibility. A licensed bankruptcy attorney can advise on a particular situation.