What Happens To All Your Money In A Chapter 13 Bankruptcy?

You may be concerned if choosing to file for Chapter 13 can lead to losing all of your assets. Such as the money you’ve invested into your home or saved in your bank account. Here’s a primer on what will happen to your money if you choose to file for Chapter 13.

The Funds In Your Bank Accounts

When you file for Chapter 13 bankruptcy, your bank accounts and funds will generally be protected. However, the exact details will depend on the specific circumstances of your case.

In a Chapter 13 bankruptcy, you will typically be required to create a repayment plan. It should outline how you will pay back your debts over a period of three to five years. During this time, your bank accounts and funds will generally be protected from seizure or garnishment by creditors.

However, there is an exemption to this rule. If you owe money to the bank where you have your accounts, they may have the right to offset the amount you owe against the funds in your account. Rest assured that any money in your bank accounts will be safe for the period of your bankruptcy.

What Happens To Your Money After Filing For Chapter 13 Bankruptcy In Texas

Your Personal Property

In a Chapter 13 bankruptcy, you typically get to keep your personal property. This is because Chapter 13 is designed to reorganize your debts and allow you to repay them over a three to five-year period. This is in contrast to liquidating your assets to pay off creditors like what happens in Chapter 7 bankruptcy.

This means it’s possible to catch up on your mortgage repayments to keep your home. You may find this particularly important if you have dependents and can’t afford to lose your home and your sense of security.

Catching Up On Mortgage Payments

If you are behind on your mortgage payments and are filing for Chapter 13 bankruptcy, you may be able to catch up on those payments through a process called “curing mortgage arrears” or “curing the default.”

Here are the general steps to catch up on mortgage payments in Chapter 13 bankruptcy:

  1. Determine the amount of the arrears. You need to know how much you owe in missed mortgage payments, late fees, and any other charges. This will be your arrearage amount.
  • Create a repayment plan. You will need to create a repayment plan that outlines how you will repay the arrears for three to five years. The bankruptcy court must approve the plan.
  • Make regular mortgage payments. In addition to making payments towards your arrearage, you must continue to make regular mortgage payments as they come due.
  • Submit payments to the bankruptcy trustee. Your plan will require you to make payments to the bankruptcy trustee, who will distribute the payments to your creditors, including your mortgage lender.
  • Complete the repayment plan. You will need to complete your repayment plan by making all of the required payments. Once you have completed the plan, any previously unpaid arrears may be discharged, and you will be current on your mortgage payments.

When in doubt, it’s a smart idea to talk to your bankruptcy lawyer to ensure that you are taking the right steps to catch up on your mortgage payments and protect your financial future.

Speak With A Capable Chapter 13 Bankruptcy Attorney

A Chapter 13 bankruptcy attorney can help you regain control of your finances by guiding you through the process of creating a repayment plan that fits your budget. They can negotiate with creditors to lower interest rates and stop collection calls. In addition, they can help you prioritize debt and create a plan to pay it off over time. 

The attorney will work with the bankruptcy court to ensure that your repayment plan is approved and help you stay on track throughout the process. Ultimately, a bankruptcy attorney can provide the support needed to regain control of your finances and move towards a brighter financial future.

If you need such assistance, Lincoln-Goldfinch Law has a team of experienced and skilled bankruptcy attorneys to help you with filing for Chapter 13. 


In Chapter 13 bankruptcy, your funds in the bank account generally remain untouched. Personal property is protected under a repayment plan. In addition, mortgage payments are included in the plan and may be restructured. 

A bankruptcy lawyer can help by guiding you through the legal process, negotiating with creditors, and creating a repayment plan that is feasible for your financial situation. They can also represent you in court and provide legal counsel.

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