Chapter 13 Bankruptcy: Keep Your Home, Catch Up on What You Owe, and Get a Plan That Actually Works

If you're a homeowner behind on your mortgage, overwhelmed by a mix of debts, or earning too much to qualify for Chapter 7, Chapter 13 bankruptcy gives you a structured, court-approved path to catch up on what you owe — while keeping your home and your assets intact. At Aronow Law, we've spent 23 years building Chapter 13 plans that address the full picture of what our clients are dealing with, not just one piece of it.

Automatic Stay Takes Effect the Day You File   •   Most Cases Discharged in 90 days in the EDNY, SDNY and New Jersey   •   Home Equity Up to $204,825 Protected for Nassau and Suffolk County Residents   •   Credit Cards, Medical Bills, Personal Loans, Most Judgments Dischargeable and more   •   Bankruptcy, Wage Garnishment, and Student Loans Resolved Together

What the Florida Divorce Process Looks Like

Understanding how agreement—or conflict—shapes the process.

What Chapter 7 Cannot Discharge

Chapter 13 Stops Foreclosure — Starting the Day You File

When you file a Chapter 13 petition, the automatic stay goes into effect immediately. That means foreclosure proceedings stop. Collection calls stop. Wage garnishments stop. The pressure stops — while you and your attorney build a repayment plan that works within your actual budget.

 

Through a 3–5 year Chapter 13 plan, you catch up on mortgage arrears in manageable installments while continuing to make your regular mortgage payments going forward. At the end of a successfully completed plan, you're current on your mortgage and your remaining eligible unsecured debts are discharged.

 

This is not a delay tactic. It is a court-supervised legal process that gives homeowners a real path to keeping their homes — even after foreclosure has already been filed.

Who Chapter 13 Is Designed For

Chapter 13 is not a last resort. It's the right tool for a specific set of circumstances — and if any of these describe you, it's worth a conversation.

 

  • You own a home and want to keep it, but you've fallen behind on mortgage payments
  • You earn too much to pass the Chapter 7 means test, but you're still overwhelmed by debt
  • You have non-dischargeable debts — back taxes, domestic support arrears — that you want to repay on a structured schedule
  • You have equity in your home or other assets you'd lose in a Chapter 7 liquidation
  • You're dealing with multiple debt problems at once: student loans, a suspended license or registration, credit card debt, and wage garnishment

 

Chapter 13 has no upper income limit. It is available to any wage earner who can demonstrate the ability to fund a repayment plan. Earning too much for Chapter 7 does not mean you're without options — it means Chapter 13 may be the better fit.

One Plan. Every Debt Problem Addressed.

Most firms treat each debt problem as a separate matter. We don't. A Chapter 13 plan can be structured to incorporate repayment arrangements for student loans, resolve suspended license and registration issues tied to outstanding debt, address wage garnishment, and discharge remaining unsecured balances upon plan completion.

 

If you're carrying a combination of problems — a mortgage in default, student loan arrears, a suspended license, and credit card debt — we build a single plan that addresses all of it. That's not a sales pitch. It's how Chapter 13 works when it's done right, and it's the kind of comprehensive approach we've taken with clients for more than two decades.

 

We handle student loan restructuring, suspended license and registration resolution, and wage garnishment relief alongside your bankruptcy case — so you're not bouncing between attorneys or leaving problems unaddressed.

How the Chapter 13 Process Works

1. Free Consultation — No Time Limit

We review your full financial picture: income, debts, assets, and what you're trying to protect. You leave knowing whether Chapter 13 makes sense, what your plan might look like, and what the process involves.

2. Filing and the Automatic Stay

Once we file your Chapter 13 petition with the Eastern District of New York, the automatic stay takes effect immediately. Foreclosure stops. Garnishments stop. Collection activity stops.

3. Building Your Repayment Plan

We develop a 3–5 year repayment plan based on your income and allowable expenses. The plan is submitted to the bankruptcy trustee and confirmed by the court. You make one monthly payment to the trustee, who distributes funds to your creditors.

4. Plan Completion and Discharge

Once you complete your plan payments, the court discharges your remaining eligible unsecured debts. You exit bankruptcy current on your mortgage and with a clear financial foundation.

What You Keep: New York's Chapter 7 Exemptions

New York law allows Chapter 7 filers to protect specific categories of assets from liquidation. These exemptions mean that most Nassau County residents who file Chapter 7 keep their home, their car, their retirement savings, and their household property.


  • Homestead exemption: Up to $204,825 in home equity protected for most New York residents
  • Vehicle exemption: Up to $5,500 in vehicle equity protected
  • Retirement accounts: 401(k), IRA, pension, and most qualified retirement accounts are fully exempt
  • Household goods and clothing: Protected up to applicable limits under New York law
  • Tools of the trade: Equipment used in your occupation, protected up to $3,575
  • Wildcard exemption: An additional amount applicable to any property of your choosing


New York also allows filers to choose between state and federal exemptions — whichever set produces the better outcome for your specific asset profile. Aronow Law reviews both options during your consultation and recommends the exemption set that protects the most.

Couple reviewing financial documents at a kitchen table with a laptop and coffee.
Brass balance scale with two hanging pans on a central stand

Chapter 13 vs. Chapter 7: Which One Is Right for You?

The right chapter depends on your income, your assets, and what you're trying to accomplish. Here's how they differ in practice.

 

  • Chapter 7 eliminates most unsecured debt quickly — typically in 4–6 months — but requires passing a means test and does not allow you to catch up on mortgage arrears. Non-exempt assets may be liquidated.
  • Chapter 13 takes 3–5 years but lets you keep your home, catch up on arrears, protect non-exempt assets, and structure repayment of non-dischargeable debts. There is no income ceiling.

 

If you're a homeowner behind on your mortgage, Chapter 13 is almost always the more appropriate tool. If you're primarily dealing with unsecured debt and have limited assets, Chapter 7 may resolve your situation faster. We'll tell you which one fits your circumstances during your free consultation.

Frequently Asked Questions About Chapter 13 in New York

  • How long does a Chapter 13 repayment plan last in New York?

    A Chapter 13 plan runs between three and five years, depending on your income relative to the state median. If your income is below the New York median, you may qualify for a three-year plan. If it's above, the standard plan length is five years. Your attorney will determine which applies based on your actual numbers.

  • Can Chapter 13 really stop a foreclosure that's already been filed?

    Yes. The automatic stay that goes into effect the moment you file Chapter 13 halts all foreclosure proceedings — including cases already filed in Nassau County Supreme Court or in the Eastern District of New York. Your lender cannot proceed while the stay is in place.

  • What happens if I miss a payment during my Chapter 13 plan?

    Missing payments is a serious issue that can result in your case being dismissed, which would expose you to foreclosure and collection activity again. If your financial situation changes during the plan, we can often file a motion to modify the plan. The key is to contact us immediately rather than letting payments lapse without notice.

  • Can I file Chapter 13 if I've filed bankruptcy before?

    It depends on when your previous case was filed and whether it was discharged or dismissed. Generally, if you received a Chapter 7 discharge, you must wait four years before filing Chapter 13. If your previous Chapter 13 case was dismissed, a two-year waiting period typically applies. We'll review your history during your consultation.

  • Will Chapter 13 affect my student loans?

    Federal student loans are generally not dischargeable in bankruptcy, but a Chapter 13 plan can incorporate a structured repayment arrangement that brings your loans current and stops collection activity, including wage garnishment by the Department of Education. We handle student loan issues as part of the same engagement — not as a separate matter.

Talk to a Chapter 13 Bankruptcy Attorney in Nassau County — Free

If you're behind on your mortgage, facing foreclosure, or carrying a debt load that feels impossible to manage, a Chapter 13 filing may give you more options than you think. We offer free consultations with no time limit, and you'll speak directly with an attorney — not a screener, not a paralegal.

 

Our office is located in Woodbury, New York, and we serve clients throughout Nassau County, Suffolk County, and the New York metro area. Call us at 516-762-6700 or use the form below to get started.