13 Reasons to File Chapter 13 Bankruptcy in Tacoma, WA


Chapter 13 is designed for an individual with regular income to propose a monthly repayment plan over time. Depending on the circumstances, a Chapter 13 plan may last three to five years. The person filing for Chapter 13 relief proposes the terms of the Chapter 13 plan and sends monthly payments to the Chapter 13 trustee. The Chapter 13 trustee typically starts disbursing payments to creditors once the Court confirms and approves the Chapter 13 plan. Once the terms of the plan have been completed, the Court will grant a discharge if one is available. During the course of the Chapter 13 while the automatic stay is in effect, creditors are stopped from pursuing lawsuits, garnishments, or other collection actions.

13 Common Reasons to File Chapter 13

  1. To stop a pending foreclosure of real property
  2. To end risk of repossession
  3. To stop garnishment or other creditor collection action
  4. To repay non-dischargeable Chapter 7 debt (i.e. support, restitution, criminal fines, taxes)
  5. To preserve assets or non-exempt equity that would otherwise be at risk
  6. Because there is high income and a Chapter 7 filing would be regarded as substantial abuse
  7. Because Chapter 7 relief is not available due to a prior Chapter 7 filing
  8. Because lien stripping of a wholly unsecured mortgage may be an option
  9. Because there is the potential to modify or bifurcate certain secured claims
  10. Because a Chapter 13 discharge may discharge more than a Chapter 7 would
  11. Because cosigned obligations are protected by co-debtor stay
  12. To preserve the opportunity to file a future Chapter 7 bankruptcy if needed
  13. To make an effort to repay creditors over time, usually three or five years