MASSACHUSETTS CHAPTER 13 BANKRUPTCY
Chapter 13 bankruptcy can allow qualifying Massachusetts individuals with regular income to reorganize debt through a court-approved repayment plan, typically lasting three to five years. It can be especially important for homeowners trying to catch up on mortgage arrears, people who need time to address vehicle arrears, or individuals whose income or assets make Chapter 7 less suitable. Attorney Michael Goldstein helps clients evaluate whether Chapter 13 fits their income, debts, assets, and goals.
Michael Goldstein is licensed to practice law in Massachusetts. For certain matters involving Maryland or Washington, D.C., Michael works in conjunction with Phillips Law Offices and appropriately licensed local counsel.
Chapter 13 bankruptcy allows eligible individuals with regular income to propose a court-supervised repayment plan, usually lasting three to five years. The plan can provide time to catch up on certain secured debts, address priority obligations, and repay creditors according to the requirements of the Bankruptcy Code while generally allowing the debtor to retain property.
Chapter 13 can be particularly useful for homeowners who are behind on a mortgage but now have enough income to resume regular payments. Mortgage arrears may be addressed through the Chapter 13 plan while ongoing mortgage payments continue outside or through the plan, depending on local practice and the case structure.
Eligibility depends on factors including income, debt limits, prior filings, assets, and whether the proposed plan is feasible.
Chapter 13 may be worth evaluating if you have regular income but need time to catch up on mortgage or vehicle arrears, want to protect property that may not be fully protected in Chapter 7, or need a structured way to address debts that cannot simply be discharged.
CHAPTER 13 BENEFITS
Chapter 13 offers powerful protections and tools that Chapter 7 does not.
Filing Chapter 13 generally triggers the automatic stay, which can stop or delay many foreclosure actions while the stay remains in effect. A Chapter 13 plan may allow qualifying mortgage arrears to be addressed over time while the debtor continues making required ongoing mortgage payments.
Chapter 13 may allow you to address vehicle-loan arrears through the repayment plan. In some cases, the treatment of the secured claim may even lower the amount owed depending on the vehicle’s value, the loan terms, and when the debt was incurred.
Filing Chapter 13 generally triggers the automatic stay, which stops most collection activity, including many lawsuits, garnishments, repossession efforts, and collection contacts. Exceptions apply, and prior bankruptcy filings can affect the scope or duration of the stay.
Chapter 13 uses a court-approved repayment plan generally lasting three to five years. The required payment depends on factors such as income, allowable expenses, secured and priority debts, nonexempt property, and the requirements of the Bankruptcy Code. Plans can sometimes be modified if circumstances change.
In some cases, a wholly unsecured junior mortgage or HELOC may be treated as unsecured in Chapter 13 when the value of the property is less than the amount owed on senior liens. Whether this treatment is available depends on the facts of the case and applicable law
Protect a co-signer, who guaranteed a personal loan or auto loan with you, from collection actions while your plan is active. This is a protection Chapter 7 doesn't offer, and it matters if you have a cosigned debt you don't want to see damage someone else's credit while you're in bankruptcy.
Repay priority tax debts through your plan on manageable terms, without the IRS actively pursuing levies or wage garnishment during the case. This is often the right fit when tax debt is too large or too recent to qualify for an Offer in Compromise but still needs to be resolved.
After completing the requirements of a confirmed Chapter 13 plan, a debtor may receive a discharge of qualifying remaining debts. Some debts are not dischargeable, and the scope of the Chapter 13 discharge depends on the nature of the obligations and the case.
Is Chapter 13 a Good option?
A temporary financial setback created mortgage arrears that you cannot realistically pay in one lump sum.
You want to keep your home and need a structured way to catch up rather than surrendering the property.
Your income may support ongoing expenses, but catching up on the past-due vehicle payments all at once is unrealistic.
Your income, assets, prior filings, or other financial circumstances may make Chapter 13 worth evaluating instead.
Priority taxes, mortgage arrears, certain secured debts, or other obligations may require a structured repayment strategy.
Chapter 13 may offer additional flexibility when property protection or repayment considerations make Chapter 7 less suitable.
Chapter 13 is not automatically the right solution simply because you are behind on a mortgage or other debt. The key question is whether a feasible plan can address the arrears and other obligations while allowing you to meet your ongoing financial responsibilities.
Discuss Your Chapter 13 Options →THE PROCESS
Michael reviews your income, debts, assets, arrears, prior filings, and goals to determine whether Chapter 13 appears feasible.
Individual debtors generally complete an approved credit-counseling course before filing, subject to limited exceptions.
Financial information is gathered, the bankruptcy petition and schedules are prepared, and a proposed Chapter 13 repayment plan is filed.
Filing generally triggers the automatic stay. The debtor later attends a meeting with the Chapter 13 trustee and answers questions under oath about the case.
The court determines whether the proposed plan satisfies the Bankruptcy Code. Creditors and the trustee may object, and the plan may be amended before confirmation.
After completing required plan payments and other case requirements, the debtor may receive a discharge of qualifying remaining debts.
Yes, in many cases. Filing Chapter 13 generally triggers the automatic stay, which can stop most foreclosure activity while the stay remains in effect. If you have enough income to maintain required ongoing mortgage payments, a Chapter 13 plan may also allow you to catch up on qualifying mortgage arrears over time instead of paying the entire past-due amount at once.
Learn How Chapter 13 Can Stop Foreclosure in Massachusetts →Chapter 13 may allow qualifying mortgage arrears to be paid through a court-approved repayment plan, generally lasting three to five years. This can give a homeowner time to catch up on missed payments while continuing to make required ongoing mortgage payments. The treatment of mortgage debt depends on the loan, arrears, property, income, and structure of the individual case.
Watch: How Chapter 13 Can Help With Mortgage Arrears →Chapter 7 is primarily a discharge process for qualifying debtors, while Chapter 13 uses a court-approved repayment plan that generally lasts three to five years. Chapter 13 may be better suited for someone who needs time to catch up on a mortgage or vehicle, wants to protect property, or has income or assets that make Chapter 7 less appropriate.
Compare Chapter 7 and Chapter 13 in Massachusetts →In many cases, yes. Filing bankruptcy generally triggers the automatic stay, which can stop most ongoing creditor collection activity, including many wage garnishments. Exceptions can apply, and the underlying debt still must be addressed through the bankruptcy case. If wages are already being garnished, timing can be especially important.
Learn About Stopping Wage Garnishment in Massachusetts →You generally should not stop paying every bill simply because you are considering bankruptcy. Mortgage payments, vehicle payments, utilities, taxes, insurance, and other obligations may need different treatment depending on your circumstances and the Chapter 13 plan you may propose. A bankruptcy attorney can help identify which payments should remain a priority before filing.
See Which Bills You May Need to Keep Paying Before Bankruptcy →Chapter 13 is often used by people who want to keep property while reorganizing debt. Unlike Chapter 7, Chapter 13 generally allows you to retain your property while making the payments required under a confirmed plan. However, the value of nonexempt property can affect how much unsecured creditors must receive through the plan.
Learn What Happens to Your Property in Bankruptcy →Attorney Michael Goldstein is affiliated with the Phillips Law Offices and serves as their Massachusetts counsel for bankruptcy cases.