When you’ve fallen behind on important payments like your mortgage or car loan, it can feel like there’s no way out. But Chapter 13 bankruptcy might be the financial reset you need. Unlike Chapter 7, which liquidates assets, Chapter 13 allows you to repay your debts over time—usually three to five years—while keeping your home, vehicle, and other important property.

Chapter 13 can even help in unique cases, such as restoring a suspended driver’s license due to unpaid tickets, or reducing car payments based on the vehicle’s actual value. But this process is complex and highly regulated, so having an experienced attorney guide you is essential. At Carl W. Hopkins, PA, our bankruptcy team works one-on-one with each client to create manageable payment plans that protect what matters most.

How Do You Qualify for Chapter 13?

To file for Chapter 13, you must have a regular and stable source of income. This doesn’t have to be a traditional job—Social Security benefits, retirement income, or even rent payments can qualify. However, businesses and stockbrokers are not eligible. Individuals and sole proprietors may qualify if their debts fall within legal limits and they pass a court-mandated “means test.”

This means test ensures that you don’t have enough disposable income to repay debts through a Chapter 7 filing. If your financial situation meets the requirements, you’ll be eligible to restructure your debts under Chapter 13 and begin rebuilding your financial foundation.

What Happens During the Chapter 13 Process?

Once you file, several important protections go into effect immediately: foreclosure efforts stop, wage garnishments end, and creditors must cease collection activities. You'll work with your attorney to create a realistic repayment plan that complies with the court’s requirements. This plan must show good faith, ensure creditors receive at least as much as they would in a Chapter 7 case, and allocate all your disposable income toward debt repayment.

The court will review and approve your plan, and once approved, you’ll begin making payments. As long as you keep up with your obligations, you can avoid losing your home, car, and other vital assets. At Carl W. Hopkins, PA, we provide clients with the tools and knowledge to succeed throughout the bankruptcy process.

Why Choose Carl W. Hopkins, PA?

Our firm has successfully represented numerous clients through Chapter 13 bankruptcy filings in Arkansas and beyond. We help people stop foreclosures, avoid repossessions, and resolve debt disputes with confidence. When you’re struggling under financial pressure, we’re here to help you take the next step toward long-term stability.