Chapter 13 bankruptcy can be life-changing — especially for people who are:
- behind on mortgage payments
- facing foreclosure
- trying to catch up on car payments
- earning too much for Chapter 7
- needing structured protection
But Chapter 13 is also the bankruptcy chapter with the most “surprises,” because it’s not a quick wipeout of debt. It’s a court-supervised repayment plan.
At Ginsburg Law Group, we believe clients deserve the truth upfront — not panic later.
Below are the most common Chapter 13 bankruptcy surprises we see.
Surprise #1: Chapter 13 Is Not a Quick Case — It’s a 3–5 Year Plan
Chapter 13 typically lasts:
- 36 months (3 years) or
- 60 months (5 years)
You’ll make monthly payments to a Chapter 13 trustee, and the case stays open until the plan is completed.
This is why we tell clients:
Chapter 13 isn’t a sprint — it’s a structured financial recovery plan.
Surprise #2: You May Have to Pay the Trustee AND the Mortgage
This is one of the biggest points of confusion.
In many Chapter 13 cases:
- mortgage arrears (back payments) are paid through the plan
- ongoing mortgage payments may still need to be paid directly
So clients feel like:
“I’m paying twice.”
You’re not paying twice — but you are paying:
- the past-due amount through the plan, and
- the current monthly payment going forward.
We walk clients through this carefully because payment errors can put your home at risk.
Surprise #3: Paying Your Mortgage May Become Harder at First
Even though Chapter 13 is often filed to save a home, mortgage servicing can become messy.
Clients commonly report:
- online payments disabled
- autopay canceled
- confusion about where payments should go
- “bankruptcy status” on the account
- delayed posting of payments
This is not unusual. It’s one reason you should never go into Chapter 13 without guidance.
Surprise #4: Your Bank Account Could Still Be Closed
Even in Chapter 13, banks can close accounts after bankruptcy notice.
So yes — clients still ask:
“Why did my bank close my account after bankruptcy?”
It’s the same reason: internal risk policies.
We often advise clients to:
- use a bank they don’t owe money to
- keep a cushion
- avoid relying on one payment method
Surprise #5: Your Car Loan May Be Handled Through the Plan (Or Not)
Depending on your situation, Chapter 13 may allow:
- catching up missed payments over time
- paying certain secured debts through the plan
- potentially reducing interest in some cases
But it depends on:
- the lender
- the vehicle value
- the terms of the loan
- your court’s rules
This is one area where experienced planning matters.
Surprise #6: Your Disposable Income Matters (More Than You Think)
Chapter 13 is heavily based on:
- income
- household size
- expenses
- “disposable income” calculations
Clients are sometimes surprised by:
- how strict the budget can be
- restrictions on new debt
- the need to document expenses
Surprise #7: Missing Payments Can Collapse the Case
Chapter 13 provides strong protection — but only if you stay current on:
- trustee payments
- mortgage payments (if paid directly)
- car payments (if outside the plan)
- insurance requirements
If payments fall behind, the case can be dismissed — and creditors can resume collection or foreclosure.
What Chapter 13 Can Do That Chapter 7 Usually Cannot
Chapter 13 can:
- stop foreclosure and allow time to catch up
- restructure repayment over years
- manage multiple debts in one plan
- protect certain assets that may be at risk in Chapter 7
For many people, Chapter 13 is the difference between losing and saving a home.
Chapter 13 FAQ
Does Chapter 13 stop foreclosure?
It can stop foreclosure through the automatic stay and allow arrears to be cured through the plan.
How long does Chapter 13 last?
Usually 3 to 5 years.
Do I still pay my mortgage in Chapter 13?
Often yes — either directly or through the plan, depending on the case.
Can I keep my car in Chapter 13?
Often yes. Many clients use Chapter 13 to catch up on payments.
Can I get new credit during Chapter 13?
Usually only with court/trustee permission.
The Bottom Line: Chapter 13 Works — But You Need a Plan
Chapter 13 is one of the most powerful consumer protection tools in the law. But it is also technical and unforgiving if done incorrectly.
At Ginsburg Law Group, we guide clients through the entire Chapter 13 process — from filing through plan completion — with a clear strategy and practical support.
If you’re behind on your mortgage or worried about foreclosure, contact us today to discuss Chapter 13 bankruptcy options
