Chapter 13 lawyers

The wage-earner plan is a court-supervised repayment structure for individuals with regular income who want to keep property and cure defaults over time. Eligibility begins with 11 U.S.C. section 109(e), which limits access to individuals whose noncontingent, liquidated debts fall below statutory ceilings. Congress has adjusted these figures repeatedly, and for a stretch the debt limits were consolidated into a single combined cap under temporary legislation before reverting. Because the numbers move, you confirm the current threshold on the filing date rather than relying on memory. The debtor must also have regular income sufficient to fund a plan, and a business entity cannot file under this chapter. A sole proprietor with business debt can, which is one reason self-employed people often land here.

Confirmation is governed by 11 U.S.C. section 1325, and the standards there decide whether a proposed plan survives. Chapter 13 requires that unsecured creditors receive at least as much as they would in a Chapter 7 liquidation under the best-interests test. You compute the hypothetical liquidation value of nonexempt assets and treat that as a floor for what general unsecured creditors must be paid across the life of the plan. A debtor with substantial nonexempt equity therefore cannot pay nothing to unsecured creditors even if disposable income is low.

The second gate is the disposable income requirement. If the trustee or an unsecured creditor objects, the plan must commit all of the debtor's projected disposable income to the plan for the applicable commitment period. For debtors whose current monthly income exceeds the state median, projected disposable income is calculated using the means-test mechanics of section 707(b)(2), with defined national and local standard expense allowances. Below-median debtors use their actual reasonable expenses. This split matters because two families with identical take-home pay can owe very different amounts depending on which side of the median line they sit.

The Supreme Court shaped how projected disposable income works in Hamilton v. Lanning, 560 U.S. 505 (2010). The debtor there had a one-time spike in her six-month lookback income that made her historical average unrepresentative of what she would actually earn going forward. The Court adopted a forward-looking approach, holding that a bankruptcy court may account for known or virtually certain changes in income or expenses when it projects disposable income, rather than mechanically multiplying a distorted historical average. The practical effect is that the means-test number is a starting point, not an unbreakable formula, when reliable evidence shows the future will differ.

Ownership and operating deductions were addressed in Ransom v. FIA Card Services, 562 U.S. 61 (2011). The debtor claimed the vehicle ownership expense allowance under the local standards for a car he owned free and clear, with no loan or lease payment. The Court held he could not take the ownership deduction because he had no ownership expense to cover. The allowance exists to account for actual loan or lease costs, so a debtor without such a payment cannot use it to shrink disposable income. The operating cost allowance remained available because he did incur fuel, maintenance, and insurance costs.

Beyond confirmation math, Chapter 13 gives debtors treatment powers that Chapter 7 does not. Cramdown lets a debtor bifurcate an undersecured claim into a secured portion equal to the collateral's value and an unsecured portion for the deficiency, then pay the secured portion at a court-approved interest rate over the plan. This works for many collateralized debts, but Congress carved out an exception for certain motor vehicles. The so-called 910-day rule, found in the hanging paragraph after section 1325(a), bars cramdown on a purchase-money security interest in a vehicle acquired for personal use within 910 days before filing. For those loans the debtor must pay the full claim balance, not just the car's depreciated value, though the interest rate can still be reset.

The interest rate on crammed-down secured claims follows the formula approach the Supreme Court endorsed in Till v. SCS Credit Corp., 541 U.S. 465 (2004), which starts with the prime rate and adds a risk adjustment. Courts commonly land in a range of a point or two above prime, though the number is fact-specific and depends on the debtor's circumstances and the collateral.

Lien stripping is another feature that draws homeowners to the repayment plan. When a junior mortgage or home equity line is wholly unsecured, meaning senior liens exceed the home's value so nothing supports the junior lien, Chapter 13 in most circuits allows the debtor to strip that junior lien and treat it as an unsecured claim. The junior lien is voided on completion of the plan and discharge. This differs sharply from Chapter 7, where Dewsnup v. Timm, 502 U.S. 410 (1992), and later Bank of America v. Caulkett, 575 U.S. 790 (2015), block stripping of even wholly underwater junior liens in a liquidation. A partially secured junior lien, by contrast, cannot be stripped in this chapter either, so the valuation of the home relative to the senior debt is the whole ballgame.

Curing arrears is the more common reason people file here. Chapter 13 lets a debtor behind on a mortgage spread the missed payments across the plan while resuming the regular monthly payment, halting foreclosure and keeping the house. The same cure-and-maintain logic applies to car loans not subject to the 910-day rule and to other secured obligations. Chapter 13 also requires that priority debts such as recent taxes and domestic support arrears be paid in full over the plan, which often drives the required plan payment more than unsecured creditor treatment does.

These doctrinal rules are national, written into the Bankruptcy Code and interpreted by the Supreme Court. Chapter 13 draws its numbers from figures that shift by geography, the median-income figures, the local expense standards, and the customary plan structures. Chapter 13 practice therefore looks different from one district to the next, and the customary plan terms a trustee will accept differ as well. The next section turns to how outcomes shift from one state and district to another.

The Code is uniform, but the inputs are not, and that produces meaningfully different results depending on where a debtor lives. The first variable is the median-income threshold, which the Census-derived tables set separately for each state and household size. The United States Trustee Program publishes updated figures periodically, and a family of four in a high-income state can earn well above what would push a same-size family over the line in a lower-income state. Since the median determines whether a debtor uses means-test expenses or actual expenses, and whether the commitment period defaults to a shorter or longer term, the same paycheck can yield different plan obligations in different states.

The applicable commitment period follows from that median comparison. A below-median debtor has a three-year minimum commitment, meaning a Chapter 13 plan can be as short as 36 months if it pays priority and secured obligations and satisfies the best-interests floor. An above-median debtor faces a five-year commitment period, so the plan must run 60 months when there is any disposable income to distribute. Because the commitment period is expressed as a multiplier on monthly disposable income, being over the median often increases both the duration and the total paid to unsecured creditors. A debtor can always propose a longer or fuller plan voluntarily, and many do to cure large arrears.

Local plan forms are the next source of divergence. Many districts now use a mandated form plan, while others adopted the national Official Form 113 or a district-specific version with local variations. The form dictates how you present cramdown, lien stripping, cure amounts, and the treatment of each creditor class. A Chapter 13 practitioner who moves between districts learns quickly that the sequence of paragraphs, the default provisions, and the standing trustee's preferred language differ, and using the wrong form or omitting a required disclosure invites objection and delay.

Whether the plan is a conduit or direct-pay arrangement for the ongoing mortgage is one of the sharpest district-to-district contrasts. In conduit districts the debtor pays the ongoing monthly mortgage payment to the standing trustee, who forwards it to the servicer along with the cured arrears. In direct-pay districts the debtor keeps paying the servicer outside the plan and routes only the arrears through the trustee. Conduit systems give the debtor a clean payment record and reduce servicer accounting disputes, but they raise the trustee's fee base because the ongoing mortgage flows through the trustee. Direct-pay systems lower the amount the trustee touches but put the burden on the debtor to keep current independently.

Trustee percentage fees compound that difference. The standing trustee is compensated by a percentage deducted from plan payments, capped by statute at ten percent but often set lower by the United States Trustee based on the district's caseload and expenses. In a conduit district where a large mortgage payment passes through every month, even a modest percentage produces a substantial administrative cost across 60 months. Two debtors with identical debts, one in a conduit district and one in a direct-pay district, can pay very different total administrative costs purely because of local practice.

Local exemption law also shapes the best-interests floor. States that opted out of the federal exemptions force debtors to use state exemptions, and those vary enormously. A generous homestead exemption in one state can leave a homeowner with no nonexempt equity, dropping the liquidation floor to zero, while a stingy homestead in another state produces significant nonexempt equity that must be matched in plan payments. Because the best-interests test measures a Chapter 13 plan against a hypothetical Chapter 7, the exemption scheme quietly sets a large part of what unsecured creditors must receive.

Judicial and trustee culture rounds out the picture. Some districts scrutinize expense claims aggressively and expect detailed budgets, while others confirm quickly if the numbers are within local norms. Standing trustees develop positions on issues the Code leaves open, such as how to value vehicles, what interest rate satisfies Till, and how strictly to enforce the disposable income commitment when a debtor's circumstances change. Chapter 13 practice varies here because local rules and general orders memorialize many of these expectations, and experienced local counsel know them cold.

Success rates reflect this variation too. The American Bankruptcy Institute's multi-year analysis of closed cases from 2010 through 2016 found that about 38.8 percent completed with a discharge, while more recent consumer-case summaries put completion closer to 49 percent. The spread between those figures is partly methodological and partly geographic, because completion depends heavily on how realistic the confirmed Chapter 13 plan was, how the local trustee handles modifications, and how stable the debtor's income proves. A plan that is too tight at confirmation tends to fail, and districts differ in how much cushion they tolerate.

Broader filing trends set the backdrop. According to the Administrative Office of the United States Courts, total bankruptcy filings rose 14.2 percent in calendar year 2024, with non-business filings reaching 494,201. Chapter 13 volume tracks these numbers, and rising filings strain trustee offices and court dockets, which can lengthen the time to confirmation and to the first available 341 meeting date. When you weigh where and how to file, these operational realities matter as much as the statutory formulas.

Understanding that the same debtor can face different obligations, forms, and odds depending on the courthouse, the next step is to walk through what a Chapter 13 case actually involves after filing, from the petition through the discharge.

A case begins with the petition, schedules, and the proposed plan. The petition opens the case and triggers the automatic stay under 11 U.S.C. section 362, which stops collection, foreclosure, repossession, and wage garnishment the moment it is filed. The schedules disclose assets, liabilities, income, and expenses, and the statement of financial affairs lays out recent transfers and payments. The plan itself must be filed early, within 14 days of the petition under the bankruptcy rules unless the court extends the time, and it sets out how each creditor class will be treated over the life of the case.

Plan payments start fast. Under section 1326, the debtor must begin making the proposed plan payment to the standing trustee within 30 days of filing, even before the court confirms the plan. This front-loaded obligation weeds out debtors who cannot actually fund the plan they proposed. A Chapter 13 case that is not funded will not survive. If payments are not made, the trustee moves to dismiss, and the case can end before confirmation is ever reached. The trustee holds these pre-confirmation payments and disburses them according to the confirmed plan, refunding to the debtor any amounts a rejected plan would not have required.

The meeting of creditors under section 341 follows a few weeks after filing. The standing trustee, not a judge, presides. A Chapter 13 debtor appears under oath and answers questions about the schedules, the assets, the income, and the feasibility of the plan. Creditors may attend and question the debtor, though in consumer cases they rarely do. The trustee uses this meeting to verify identity, confirm the tax returns and pay records were provided, and raise any concerns about valuation, exemptions, or disposable income. Many objections get resolved informally in the days around the 341 meeting through amended schedules or a modified plan.

Confirmation is the hearing where the court decides whether the plan meets the standards of section 1325. The trustee files a recommendation, secured creditors may object to valuation or interest rate, and unsecured creditors may object that the plan fails the disposable income or best-interests requirements. If objections are resolved, courts often confirm on the papers or at a brief hearing. If a genuine dispute remains, such as the value of a home for lien-stripping purposes or whether a claimed expense is reasonable, the court holds an evidentiary hearing. Chapter 13 places the burden on the debtor to prove the plan is proposed in good faith and is feasible, meaning the debtor can realistically make every payment it requires.

Once confirmed, the plan binds the debtor and creditors under section 1327. Chapter 13 then governs the debtor's life for the committed term, which runs 36 to 60 months depending on the median-income posture and the amounts owed to priority and secured creditors. During this period the debtor makes the single monthly payment to the trustee, who distributes it to creditors according to the confirmed terms. The debtor must also stay current on ongoing obligations, file tax returns, turn over refunds if the plan requires it, and avoid incurring significant new debt without court approval. Missing payments puts the case at risk of dismissal, and the trustee monitors compliance throughout.

Life rarely holds still for five years, and the Code anticipates that. Under section 1329, the debtor, the trustee, or an unsecured creditor may move to modify a confirmed plan after confirmation. A debtor who loses a job, faces a medical crisis, or takes a pay cut can seek to reduce the payment or suspend payments temporarily. A debtor whose income jumps may face a trustee motion to increase the payment. A Chapter 13 modification cannot extend the plan beyond the statutory maximum of 60 months, so a debtor who has already run most of the term has limited room to stretch. The forward-looking approach of Hamilton v. Lanning informs these motions, because the question is again what the debtor can realistically pay going forward given the changed reality.

Completion produces the discharge under section 1328(a). When the debtor finishes all payments, completes the required financial management course, and certifies compliance with domestic support obligations, the court enters a discharge that eliminates most remaining unsecured debt. The Chapter 13 discharge is broader than the Chapter 7 discharge in some respects, historically covering certain debts that a liquidation would leave intact, though Congress has narrowed that gap over the years. Debts excepted from discharge, such as most student loans absent an undue hardship finding, recent taxes, domestic support, and debts for fraud, survive.

Not every debtor reaches the finish line, and the Code provides a safety valve. The hardship discharge under section 1328(b) allows a debtor who cannot complete the plan to obtain a discharge anyway, but only on strict conditions. The failure must be due to circumstances for which the debtor should not justly be held accountable, the creditors must already have received at least what they would have gotten in a Chapter 7 liquidation, meaning the best-interests floor must have been satisfied, and modification of the plan must not be practicable. A debtor who suffers a permanent disabling injury partway through a Chapter 13 plan is the classic candidate. The hardship discharge is narrower than the completion discharge and leaves more categories of debt intact, so it is a fallback rather than a goal.

Dismissal is the other exit. Under section 1307, the debtor has an essentially absolute right to dismiss a Chapter 13 case that was not converted from another chapter, and the trustee or creditors can seek dismissal for cause such as unreasonable delay or failure to make payments. A debtor who cannot fund the plan and does not qualify for a hardship discharge often converts to Chapter 7 or accepts dismissal and starts over. Chapter 13 rewards debtors who understand these exits before filing, because that knowledge helps a debtor choose a plan that is achievable rather than aspirational, which is where competent counsel earns its keep.

Because the exits shape strategy, the statistics on how these cases actually end should inform the plan a debtor proposes on day one. The raw volume tells part of the story. The Administrative Office of the United States Courts reported that total bankruptcy filings rose 14.2 percent in calendar year 2024, with non-business filings reaching 494,201. That increase followed several years of unusually low filing counts, and it reflects the ordinary pressures of consumer debt loads, higher interest rates, and the resumption of collection activity that had paused during earlier relief programs. A rising tide of filings means trustees carry heavier caseloads, and heavier caseloads can mean slower confirmation and less patience for plans that need repeated amendment.

Completion rates are the number every prospective debtor should study before committing to a three to five year commitment. The American Bankruptcy Institute analyzed closed cases over a multi-year window from 2010 to 2016 and found that roughly 38.8 percent completed with a discharge. That is fewer than four in ten. More recent consumer-case summaries put completion closer to 49 percent, nearer to half. The gap between those figures reflects differences in the samples, the years studied, and the mix of cases, but the honest takeaway is sober either way. A meaningful share of debtors who file under Chapter 13 do not reach the finish line. They fall out along the way, usually because the plan payment was set higher than the household budget could sustain once real life intervened.

Understanding why cases fail is more useful than memorizing the percentage. A car breaks down. Overtime disappears. A medical bill arrives. The plan payment that looked manageable at confirmation becomes impossible in month fourteen, and the debtor misses payments. The trustee files a motion to dismiss for material default under section 1307. If the debtor cannot cure the arrears or modify the plan under section 1329, the case is dismissed. Dismissal is not a neutral event. When a case is dismissed, the automatic stay dissolves, and creditors are free to resume collection, foreclosure, repossession, and garnishment as though the bankruptcy never happened. Interest and fees that the plan would have addressed continue to accrue on many debts. The debtor is often left worse off in cash terms than before filing, because plan payments went partly to trustee fees and administrative costs rather than reducing principal on every claim.

Dismissal also carries procedural consequences for anyone who wants to try again. Under section 362(c)(3), a debtor who files a second case within one year of a prior dismissal gets an automatic stay that expires after 30 days unless the court extends it, and a debtor with two prior dismissals in the same year may get no automatic stay at all without an affirmative motion. These provisions exist to discourage serial filing used to delay creditors, and they punish the disorganized as readily as the abusive. A debtor whose first Chapter 13 plan collapses should not assume a fresh filing will restore the same protection. That reality is one more reason to propose an achievable plan the first time rather than an optimistic one.

Fee structure is the piece debtors most often misunderstand, and it works in their favor here. In most consumer cases, the debtor's attorney is paid through the plan rather than entirely up front. A modest retainer covers the filing, and the balance of the agreed fee is built into the monthly plan payment and disbursed by the trustee over the life of the case. Many districts publish a presumptively reasonable fee, sometimes called a no-look fee, that counsel may charge without filing a detailed fee application. The exact figure varies by district and by the complexity of the case, and courts retain authority under section 330 to review fees for reasonableness. The practical effect is that a debtor with little cash can still retain competent counsel, because the lawyer accepts payment over time and carries some collection risk if the case fails.

The Chapter 13 trustee also takes a percentage of every dollar that flows through the plan, capped by statute at 10 percent, and that percentage is set by the United States Trustee Program for each standing trustee. A debtor evaluating whether a plan pencils out should account for both attorney fees and the trustee's cut, because those administrative costs come off the top before general unsecured creditors see anything. On a plan paying $500 a month for 60 months, the trustee's fee alone can consume several thousand dollars over the life of the case. None of this is hidden. Counsel should walk a client through the arithmetic before filing so the client understands where each month's payment goes.

The disposable income calculation drives the size of that monthly payment for above-median debtors, and two Supreme Court decisions govern how it is computed. Hamilton v. Lanning, 560 U.S. 505 (2010), held that a court may use a forward-looking approach to projected disposable income when the debtor's actual future circumstances are known to differ from the historical average the means test produces. Ransom v. FIA Card Services, 562 U.S. 61 (2011), held that a debtor may not claim a vehicle ownership expense deduction for a car owned free and clear with no loan or lease payment. Together these cases mean the Chapter 13 payment is neither a pure mechanical output nor a matter of the debtor's preference. It is a projection grounded in real numbers, and a plan built on inflated expense deductions invites objection and, later, default.

Read the statistics as a design brief. Chapter 13 rewards the debtor whose payment the household can actually make in month one and month fifty, through the ordinary shocks of five years. Chapter 13 is not defeated by the four-in-ten and near-half completion figures, and those numbers are not a reason to avoid this path. A conservative plan is what makes Chapter 13 work, and Chapter 13 succeeds when the arithmetic is honest from the start. They are a reason to build the plan conservatively.

Everything in the doctrine section comes back to a single practical question. Can this debtor confirm and complete a plan, and does the lawyer sitting across the table know how to design one that fits? The eligibility rules, the debt limits, and the requirement of regular income that opened this guide are not abstractions. They are the raw material a competent lawyer uses to decide whether a repayment plan is the right tool at all, and if it is, how to shape it. The wrong lawyer treats the plan as a form to fill in. The right lawyer treats it as a five-year budget the client has to live inside.

Start with volume and focus. A lawyer who files consumer bankruptcies regularly knows the local trustee's habits, the district's presumptive fee, and the objections that recur in that court. Chapter 13 is intensely local in practice even though the statute is federal. A standing trustee in one district reads vehicle expenses one way, and a trustee two states over reads them another way. Counsel who appears before the same trustee every week can predict which deductions will draw a fight and which will pass. Ask a prospective lawyer how many of these cases the firm handles in a typical month, and how many go the distance to discharge rather than dismissal. A candid answer is more valuable than a confident one.

Probe how the lawyer handles the disposable income analysis, because that is where Chapter 13 cases are won or lost before they are even filed. A lawyer who understands Hamilton v. Lanning and Ransom v. FIA Card Services will talk about projected income and defensible expenses rather than promising a specific low payment before reviewing the pay stubs. Be wary of anyone who quotes a plan payment at the first meeting without examining the numbers. Precision at intake predicts survival later. The eligibility and debt-limit questions from the first section of this guide are the same questions a good lawyer asks in the first twenty minutes, because a debtor over the unsecured or secured limit cannot proceed here at all and needs a different chapter or a different plan.

Ask directly about the exits. Counsel should explain, without prompting, what happens if the plan fails, how conversion to Chapter 7 works, when a hardship discharge under section 1328(b) is available, and what dismissal would cost the client in restored collection activity. A lawyer who only sells the upside is not preparing the client for the realistic path. The completion statistics from the previous section make this conversation mandatory. Because a meaningful share of Chapter 13 cases do not finish, the client deserves a plan built with the failure modes in mind and a lawyer who has thought about them.

Fee transparency is easy to test. The lawyer should tell you the retainer, the total fee, how much runs through the plan, whether the district uses a no-look fee, and what happens to the fee if the case is dismissed early. Get it in writing. A retainer agreement that spells out the through-plan portion and the up-front portion protects both sides. If a lawyer is vague about money at the outset, expect vagueness about the plan later. Chapter 13 fees are largely paid through the plan itself, which is one reason the fee arrangement deserves close reading.

This directory lists firms that handle repayment-plan cases, and where a firm has earned verification, its checks are dated and editor-reviewed so you can confirm that its licensing, standing, and practice claims were reviewed by a person and not simply scraped from a website. Use those checks as a floor, not a ceiling. Verification confirms that a firm is who it says it is and practices where it says it does. It does not replace the conversation about disposable income, plan feasibility, and exits that you still need to have. When this directory orders firms by plan-tier, that ordering reflects transparent tier criteria disclosed on the page rather than payment for placement, so a higher position signals disclosed tier participation, not a better outcome for your Chapter 13 case.

Bring documents to the first meeting and watch how the lawyer uses them. Six months of pay stubs, recent tax returns, a list of debts with balances, and statements for any secured loans let a competent lawyer sketch a realistic plan on the spot. A lawyer who engages with the actual numbers is doing the work. One who waves the documents aside and talks in generalities is not. The debt limits and income requirements that define Chapter 13 eligibility become concrete only when someone reads your paperwork, and the lawyer who reads it carefully at intake is the lawyer most likely to file a plan that confirms.

Finally, judge the fit. Your Chapter 13 case will keep you working with this person or firm for three to five years, through payment changes, motions, and the ordinary friction of a long case. Responsiveness matters. Ask who will actually handle your case, whether you will speak with the lawyer or only with staff, and how the firm communicates when the trustee raises an issue. Chapter 13 is a relationship as much as a document. The doctrine from the opening section tells you whether you qualify. The lawyer you choose determines whether qualifying turns into a completed discharge or a dismissed case and a fresh set of collection letters. Choose for competence, candor, and staying power, verify the basics, and then commit to the budget the plan requires.