As I understand it, Ch 13 bankruptcy protects a person by letting them repay their debts over a period of some 5 years. What if a person has more debt than they can repay in 5 years? (In the state of Georgia, in the USA.) (Assume the person has filed for Ch 7 less than 8 yers ago, so the only bankruptcy available to them is ch 13.)

1 Answer 1


According to the US Courts website, not all debts need to be paid in full in Chapter 13 proceedings:

The plan need not pay unsecured claims in full as long it provides that the debtor will pay all projected "disposable income" over an "applicable commitment period," and as long as unsecured creditors receive at least as much under the plan as they would receive if the debtor's assets were liquidated under chapter 7. 11 U.S.C. § 1325.

If they can't pay even this reduced amount, then they probably don't belong in Chapter 13.

If the court declines to confirm the plan, the debtor may file a modified plan. 11 U.S.C. § 1323. The debtor may also convert the case to a liquidation case under chapter 7.

  • It sounds like the creditors would do better if the bankruptcy was not allowed. It sounds like the creditors could then attach salary forever. Is that correct?
    – user3270
    Dec 3, 2017 at 10:28
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    In the situation in question, the person filed for ch 7 less than 8 years ago. So it's ch 13 or nothing.
    – user3270
    Dec 3, 2017 at 10:29
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    @user3270: Yes, that is correct - without bankrupty unpaid debts would stay forever. However, society has decided that it is not fair or reasonable to force someone to pay debts forever - thus the system of bankruptcy.
    – sleske
    Aug 20, 2020 at 8:39
  • @user3270 There is generally a statute of limitations on the enforcement of state law judgments, but it is typically long (e.g. 20 years). One of the reasons for bankruptcy is to encourage someone to work rather than refrain from work since too much of the proceeds goes to creditors.
    – ohwilleke
    Oct 7, 2020 at 18:43
  • Worth noting that a Chapter 13 plan can include liquidation of some but not all assets and frequently does. Often the goal is to save a residence and a car, while applying all non-use assets that are not exempt from creditor's claims to creditor's claims.
    – ohwilleke
    Oct 7, 2020 at 18:44

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