Chapter 13 FAQs


What is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy is a debt repayment plan that generally runs over a 3-5 year period. The debtor makes a specified payment to the Chapter 13 trustee, who then distributes the money to creditors. The amount creditors receive can vary between 1% and 100%, depending on the Debtor’s ability to repay. The debtor receives a discharge of all dischargeable debts upon completion of the Plan.

Who determines how much my Chapter 13 payments will be?

The amount of your Chapter 13 payments are based upon your income, your monthly living expenses, and the amount of your total debts. You are allowed to keep and spend as much of your income as is necessary to maintain a reasonable standard of living.

Will I be able to keep all of my property?

Yes, a Chapter 13 case protects all of your property. However, you can still choose to surrender an asset if you wish, such as a car or house, so as to have a lower monthly payment.

Who can file a Chapter 13 Bankruptcy?

In order to file in Georgia you must have lived in the state within the past 90 days.

How long will a Chapter 13 Plan last?

Chapter 13 repayment Plans last from 36 to 60 months. Upon completion of the Plan, the Debtor is discharged, meaning all of the debts are legally forgiven forever.

What are the most common causes of Chapter 13 Bankruptcy?

The most common reasons for bankruptcy are (a) loss of a job or long-term layoffs; (b) loss of overtime hours; (c) large medical expenses or lengthy illnesses; (d) death or disability of a spouse; (e) separation, divorce and marital problems; (g) large unanticipated expenses.

Can I stop the bill collectors from calling?

All creditor actions, including phone calls, garnishments, and lawsuits, are immediately stopped when a case is filed.

I am married; does my spouse also have to file bankruptcy?

No. In some cases where only one spouse has debts, then it might be advisable to have only one spouse file. Keep in mind, however, that a Spouse’s income must be disclosed to the Court, even if that Spouse does not file.

Will I lose my job?

No. Bankruptcy laws prohibit such discrimination based upon a debtor filing for protection under the bankruptcy laws.

Will Bankruptcy stop a wage garnishment?

Yes. All collection efforts, including garnishments, are immediately stopped when a case is filed. (Except for regular monthly child support payments)

Will Bankruptcy stop a foreclosure?

Yes, all foreclosures are immediately stopped when a case is filed. The Debtor must make all future mortgage payments in a timely manner in order to retain the house.