Reviewed and updated August 24, 2026.
Chapter 13 Bankruptcy in Arizona
What Chapter 13 Actually Does
Chapter 13 is reorganization rather than liquidation. Instead of discharging what you owe in a few months, you propose a repayment plan running three to five years, make one consolidated monthly payment to a trustee, and receive a discharge of what remains at the end.
The payment is based on what you can actually afford — not on what your creditors would like. Depending on your budget, a plan may repay anywhere from 0% to 100% of your unsecured debt. Two people owing identical amounts can have very different plans, because the number that matters is your income minus your allowed expenses, not the size of the debt.
It's more involved than Chapter 7, and it takes years rather than months. People choose it because it does things Chapter 7 cannot.
What Chapter 13 Can Do That Chapter 7 Can't
Save a home from foreclosure. This is the most common reason. Missed mortgage payments get folded into the plan and paid off over its life while you keep making your regular payment. Your lender is bound by the confirmed plan. → Stopping a trustee's sale in Arizona
Keep property that exceeds the exemptions. In Chapter 7 a trustee can sell property that isn't exempt. In Chapter 13 nothing is sold — you keep it and pay its value into the plan instead. For people with equity in a home, a paid-off vehicle, or business equipment, that's the whole reason to be here.
Restructure a car loan. In some circumstances an older vehicle loan can be reduced to what the car is actually worth rather than what you owe, with the interest rate adjusted to a reasonable figure.
Stop a repossession — or get the car back. The automatic stay halts a repossession the moment your case is filed. And if your car has already been taken, it can often still be recovered — but only while the lender still has it. Once it's sold at auction, it's gone. Getting a repossessed vehicle back usually takes more than filing alone; the court has to order it turned over. That makes the days immediately after a repossession the whole ballgame. If your car has been repossessed, call the same day — the window is short and it closes for good at the auction.
Handle tax debt properly. Priority tax debt gets paid through the plan over its term, while older liabilities may be discharged along with everything else. Tax debt inside bankruptcy is where most consumer attorneys start referring out — it's the part of this I handle myself.
Escape a debt consolidation contract. People trapped in expensive consolidation or settlement programmes that aren't working can leave them through Chapter 13.
File when you don't qualify for Chapter 7. If your income is above the means test threshold, Chapter 13 is the route that remains open.
What You'd Actually Pay
Your plan payment is built from disposable income — what's left after subtracting allowed expenses from your net earnings.
Some of those expenses are your real out-of-pocket costs. Others are set by national and local standards published by the IRS, which means the calculation isn't purely a matter of what you say you spend.
The practical consequence is straightforward: the less disposable income you have, the smaller the share of your unsecured debt you repay. Plans that repay very little of the unsecured debt are common. What's left unpaid at the end of a completed plan is discharged.
Do You Qualify?
Chapter 13 is for individuals with regular income — employment, self-employment, benefits, or a pension all count. It isn't available to corporations.
There are also limits on how much debt you can have and still file under Chapter 13, with separate caps for secured and unsecured debt. These are adjusted periodically.
You'll also need to be current on tax filings, and there are timing rules if you've had a previous bankruptcy case.
What Actually Happens
Before filing — the credit counseling course. Required from an approved agency within 180 days before filing. Done online, takes about 30 minutes.
Filing. Your petition, schedules and proposed plan go to the U.S. Bankruptcy Court for the District of Arizona. The automatic stay takes effect immediately — stopping foreclosure, garnishments, repossession and collection calls the same day.
Plan payments begin. These start within 30 days of filing, before the plan is even confirmed.
About 30–40 days later — the meeting of creditors. The 341 meeting. A trustee asks you questions under oath about your paperwork. Usually short.
The confirmation hearing. The court approves the plan, sometimes after adjustments negotiated with the trustee or a creditor.
Three to five years of payments, made to the trustee, who distributes to creditors.
The debtor education course, completed before discharge.
Discharge. Remaining eligible unsecured debt is wiped out.
What Chapter 13 Doesn't Do
It doesn't reduce what you owe on the house. Mortgage arrears get spread out, not forgiven. You still have to afford the regular payment going forward — Chapter 13 catches you up, it doesn't make an unaffordable house affordable.
It doesn't discharge everything. Child support, alimony, most student loans, recent taxes and criminal restitution survive. Some of these must be paid in full through the plan.
It requires you to finish. A plan is a three-to-five-year commitment, and a meaningful share of Chapter 13 cases nationally don't reach discharge — usually because income drops or life intervenes. If a plan fails partway, you generally lose its protections and the debts return. This is the main reason to be honest with me about your budget at the start rather than proposing a payment you hope you can manage.
It stays on your credit report for seven years — three fewer than Chapter 7.
Chapter 7 or Chapter 13?
Chapter 7 eliminates qualifying unsecured debt in about three to four months. If you pass the income test and don't need to save a home or protect non-exempt property, it's usually simpler and faster. → Learn about Chapter 7
Facing a trustee's sale? That's the situation Chapter 13 was built for, and timing matters more than anything else. → Stop foreclosure in Arizona
Still weighing bankruptcy against debt settlement? → Debt settlement vs. bankruptcy
Talk It Through First
Chapter 13 is considerably more complex than Chapter 7, and the plan you propose at the start determines the next several years of your life. It's worth getting right.
Consultations are free. I'll look at your income, your property and your debts and tell you whether Chapter 13 fits, whether Chapter 7 is the better route, or whether neither is.
I file throughout Arizona and meet with clients virtually.
Common Questions
How much will my monthly payment be? It depends on your disposable income, not on the size of your debt. Two people owing the same amount can have very different payments. We work it out from your actual budget in the consultation.
Can I keep my house? That's the main reason people file Chapter 13. If you can afford your ongoing mortgage payment, the arrears can be cured through the plan.
Can I keep my car? Usually. Chapter 13 lets you keep financed vehicles and pay them through the plan, and in some circumstances restructure the loan.
What if my income changes during the plan? Plans can sometimes be modified. Tell me early rather than missing payments — the options are far better before a default than after.
Three years or five? It depends primarily on your income relative to Arizona's median. Lower incomes generally allow a three-year plan; higher incomes usually require five.
What happens if I can't finish the plan? Depending on circumstances the case may be converted to Chapter 7, modified, or dismissed. Dismissal is the worst outcome, which is why the plan needs to be realistic from the start.
Do I have to go to court? There's the 341 meeting with the trustee, and a confirmation hearing your attorney typically handles. Most clients see very little of a courtroom.
Can I file Chapter 13 if I've filed before? Often yes, though timing rules affect whether you can receive a discharge. Tell me about any prior filing at the outset.
When You Hire Me, You Get Me
I'm Nathan J. Brelsford. I've been handling Chapter 13 cases in Arizona since 2006.
Your calls, texts and emails come to me directly — not to a paralegal, not to an intake team. To the attorney who actually knows your case. I can work that way because I keep my caseload small.
Free face-to-face consultations · Free phone consultations · Call 602.661.9000