Chapter 13 Bankruptcy in St. Louis

What Is Chapter 13 Bankruptcy?

Chapter 13 is a "reorganization" bankruptcy that allows you to restructure your debts and repay them — partially or in full — over a 3 to 5 year court-supervised repayment plan. Unlike Chapter 7, which liquidates debt quickly, Chapter 13 is the right tool when you have assets you want to protect, debts you need to catch up on, or income that disqualifies you from Chapter 7.

Chapter 13 is the most powerful tool available to homeowners facing foreclosure. When you file, the automatic stay immediately halts the foreclosure process — even if a sale is scheduled for the next day. Your repayment plan then allows you to spread out the mortgage arrears over the plan period while continuing to make your regular monthly mortgage payment.

Who Should File Chapter 13?

Chapter 13 is the right choice if one or more of the following apply to you:

• You are behind on your mortgage and want to save your home from foreclosure
• Your income is too high to qualify for Chapter 7 under the means test
• You are behind on car payments and want to keep your vehicle
• You owe back taxes or domestic support arrears that can be paid through the plan
• You have non-exempt assets (such as significant equity in your home) that you want to protect
• You filed Chapter 7 less than 8 years ago and need bankruptcy protection again

How the Repayment Plan Works

In Chapter 13, you propose a repayment plan that lasts between 36 months (if your income is below the state median) and 60 months (if your income is above the median). Each month, you make a single plan payment to the bankruptcy trustee, who then distributes the funds to your creditors according to the plan.

Your plan payment is based on your disposable income — what's left after your allowed living expenses. Secured creditors (mortgage, car) and priority debts (taxes, support) are paid first. Unsecured creditors (credit cards, medical bills) receive whatever is left over, and any remaining unsecured balance is discharged at the end of the plan.

Chapter 13 trustee percentage: In the Eastern District of Missouri, the trustee collects 6.60% of all plan payments as an administrative fee. This is factored into your plan.

What Happens to Your Mortgage?

Your current monthly mortgage payment continues as normal during your Chapter 13 plan — you pay it directly to your lender. The mortgage arrears (the past-due amount that caused the foreclosure) are rolled into your plan and paid over the plan period. As long as you make your plan payments and continue your regular mortgage payment, the lender cannot foreclose.

At the end of your Chapter 13 plan, your mortgage is current, your unsecured debts are discharged, and you own your home free and clear of the bankruptcy.

Chapter 13 Timeline

• 1
  Free consultation — Attorney Baro reviews your situation and confirms Chapter 13 is the best option.
• 2
  Credit counseling — Completed online in about 1 hour (required before filing).
• 3
  Petition filed / automatic stay begins — Foreclosure and all collection actions stop immediately upon filing.
• 4
  341 meeting of creditors — Usually 3–5 weeks after filing; typically 10 minutes under oath.
• 5
  Plan confirmation hearing — The court approves your repayment plan, usually within 30–60 days of the 341 meeting.
• 6
  Monthly plan payments — Continue for 36–60 months. You must also complete a debtor education course before discharge.
• 7
  Discharge — After your final plan payment, remaining eligible debts are discharged. You're done.