I Can’t Afford a Chapter 13 Plan and

I Have No Assets — Now What?

If you’ve been told you need to file Chapter 13, but you can’t afford the monthly payment and you don’t have assets to protect, you’re not alone. This is a very common — and very frustrating — position to be in.

The good news is this: Chapter 13 is not the only option, and in many cases, it may not be the right option at all.

This page explains what your situation likely means, what options may still exist, and how to move forward without making things worse.

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First: You Are Not Doing Anything Wrong

Chapter 13 is designed for people who:

• Have regular income

• Can afford a monthly plan payment

• Need to protect assets (like a home)

If you don’t fit that profile, the problem is not you — it’s that Chapter 13 may not match your financial reality.

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Why Chapter 13 May Truly Be Unaffordable

A Chapter 13 plan can be unaffordable if:

• Your income barely covers necessities

• You have no disposable income

• Your expenses are already minimal

• A plan payment would cause new hardship

Bankruptcy law does not require you to propose an impossible plan.

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If You Have No Assets, Chapter 7 May Be an Option

If you:

• Do not own a home

• Have little or no equity in property

• Have modest income

• Are not behind on secured assets you want to keep

Chapter 7 bankruptcy may be the correct solution, even if someone previously suggested Chapter 13.

Chapter 7:

• Does not require a monthly payment plan

• Eliminates qualifying unsecured debt

• Is often completed in a few months

Many people are incorrectly told they “must” file Chapter 13 when Chapter 7 is actually available.

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What If I Don’t Qualify for Chapter 7 Either?

Even if Chapter 7 is not available right now, you may still have options.

Option 1: Timing Matters

Income changes, job loss, reduced hours, or waiting a short period of time can:

• Change means test eligibility

• Make Chapter 7 possible later

Sometimes the right move is strategic timing, not immediate filing.

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Option 2: Bankruptcy May Not Be the Right Tool — Yet

If bankruptcy is not affordable or helpful right now:

• Filing too early can backfire

• A dismissed Chapter 13 can make things worse

In some cases, waiting and planning is the smarter choice.

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Other Options When Bankruptcy Isn’t Feasible

Depending on your situation, alternatives may include:

• Doing nothing temporarily (when you are judgment-proof)

• Defending or delaying lawsuits

• Negotiating with creditors selectively

• Using consumer protection laws to stop harassment

• Allowing time to pass while income stabilizes

For people with low income and no assets, creditors often have limited collection power.

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“Judgment-Proof” — What That Means

You may be considered “judgment-proof” if:

• You have no non-exempt assets

• Your income is protected from garnishment

• You rely on exempt sources (like Social Security)

In these situations, bankruptcy may not provide meaningful additional benefit — at least not immediately.

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What Not to Do Right Now

❌ Don’t file a Chapter 13 you can’t afford
❌ Don’t drain retirement accounts to fund a plan
❌ Don’t take high-interest loans to pay creditors
❌ Don’t assume “no options” means “give up”

Bad filings create long-term problems.

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What a Good Attorney Should Do in This Situation

A good attorney should:

• Tell you honestly if Chapter 13 doesn’t make sense

• Evaluate Chapter 7 eligibility carefully

• Discuss timing and alternatives

• Help you avoid filings that will fail

If someone is pushing Chapter 13 despite clear inability to pay, get a second opinion.

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So… Now What?

If you can’t afford Chapter 13 and have no assets, the next step is not panic — it’s clarity.

You need to know:

• Whether Chapter 7 is possible now or later

• Whether bankruptcy helps at all in your situation

• Whether waiting is the best strategy

• How to protect yourself in the meantime

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Talk to a Lawyer Before Making the Wrong Move

Bankruptcy should relieve pressure, not create new stress. Filing the wrong case can cause lasting harm.

Ginsburg Law Group helps clients understand when bankruptcy makes sense — and when it doesn’t — so they can move forward safely.

 

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📞 Call us today for a free, confidential bankruptcy consultation – 855-978-6564 or email us at bankruptcy@ginsburglawgroup.com.

Contact our Bankruptcy Team: bankruptcy@ginsburglawgroup.com

We work with most major legal services and legal insurance plans.  Some cover your legal fees for bankruptcy services.  Give us a call today to see if your bankruptcy is covered!

BANKRUPTCY TEAM

AMY GINSBURG – aginsburg@ginsburglawgroup.com

GRACIE KLEIN – gklein@ginsburglawgroup.com

NICOLE LOMBARDI – nlombardi@ginsburglawgroup.com