Chapter 7, which is the most common form of bankruptcy filed across the U.S., can wipe out your unsecured debt within months. But for those who fail to qualify or who have valuable property and assets they would like to protect, Chapter 13 may be the solution to runaway debt. This form of bankruptcy is a debt reorganization program that allows you to retain more of your assets and property in exchange for paying off more of your debt. For individuals with income that makes them ineligible for Chapter 7 even through a means test, this is your only available alternative.

If you are facing a situation where you cannot meet your financial obligations, are subject to creditor harassment, at risk of wage garnishments, repossessions, or foreclosure, your best action is to turn to an experienced attorney. The Law Offices of Joshua Cavanaugh concentrates its entire practice on bankruptcy solutions for individuals and small businesses in Fort Bend County. Attorney Joshua Cavanaugh is here to listen to your story, understand your needs, and help you make the right decisions about the best way to resolve your debt. 


This type of bankruptcy is often referred to as the “wage-earners” bankruptcy. That is because, to make this type of plan work, you must have a steady income flow to be able to meet your monthly expenses while making payments on restructured debt. A Chapter 13 allows you to keep your assets while consolidating your debt and making payments over a three to five-year period. 

You will have to submit the reorganization plan for approval to the court; this plan will allow you to pay off debt such as mortgage arrearages and other debt in one monthly affordable payment with disposable income through the court over the life of the plan. Once the plan is completed, any remaining unsecured debt owed is discharged. 

It is important to note that some debts cannot be included in a Chapter 13 plan, such as unpaid child support, alimony, most taxes, student loans, and personal injury settlement obligations. However, the advantage of a Chapter 13 filing is apparent where secured loans are concerned. By restructuring these loans, you may be able to keep the collateral. Thus, through Chapter 13, you may be able to save your home from foreclosure, your car from repossession, and stop wage garnishments. 

Chapter 13 requires you to complete a court-approved credit counseling program. It also requires you to complete a debt education course before your bankruptcy case can be concluded and a discharge of your remaining debts can be granted.