Chapter 13 lets you keep your property while repaying debts over 3-5 years. But in Newark, the dismissal rate is alarming -- meaning many filers never complete their plan.
Chapter 13, sometimes called a "wage earner's plan," allows people with regular income to create a court-supervised repayment plan lasting 3 to 5 years. You make monthly payments to a bankruptcy trustee, who distributes the money to your creditors.
Unlike Chapter 7, Chapter 13 does not require liquidating assets. You keep all your property. At the end of the plan, remaining eligible debts are discharged.
Chapter 13 is particularly useful for:
The data tells a concerning story. A dismissed Chapter 13 means the debtor spent months or years making payments but received no discharge -- no debt relief.
Out of 119,583 cases filed between 2008 and 2024, only 38.8% achieved a successful discharge. The prior filer rate is 31.6% -- meaning roughly 1 in 3 filers have been through the system before.
Your monthly payment is calculated based on your disposable income. The payment must cover:
After completing all plan payments, the court enters a discharge under 11 U.S.C. section 1328. If you received a prior discharge, time bars under section 1328(f) may prevent another discharge.
The District of New Jersey has a 61.2% Chapter 13 dismissal rate based on 119,583 cases (2008-2024). The prior filer rate is 31.6%.
Plans last 3 to 5 years. Below-median income may qualify for 3 years; above-median requires 5 years.
Yes. The automatic stay stops foreclosure immediately and you can catch up on missed payments through your plan.
The automatic stay ends, creditors resume collection, and you receive no discharge. You may be able to file again, but there may be waiting periods.
Use the free 1328(f) screener to check whether a prior discharge affects your eligibility.
Free Discharge Screener