Chapter 13 Case Studies

These real-life Chapter 7 bankruptcy cases tell the story about how bankruptcy can help eliminate your debt.

Hypothetical #3: Adam Filer

Adam Filer is a single parent with a 13-year-old dependent daughter. For 7 years, Adam worked for Acme, Corp. until it closed last year due to a downturn of the economy. Adam was making almost $60,000 annually at Acme Corp. Adam wasn’t able to find a new job for almost 9 months after getting laid off and fell 3 months behind on his mortgage payments. He was forced to take a job making much less and is now on a $50,000 annual salary. The value of Adam’s house has not significantly increased since he purchased it several years ago. Adam has been able to keep current on his car payments and other credit card debts ($10,000), but doesn’t see a way to catch up on his mortgage payments.


Adam can consolidate his debts and file a Chapter 13 bankruptcy to stop the foreclosure proceedings. The filing of a Chapter 13 bankruptcy stays any collection activity which is currently pending against Adam. It will also force Adam’s mortgage company to accept the owed mortgage arrears over a 36-60 month period in his Chapter 13 Repayment Plan.

Joe and Mary would be able to keep their house and 2 cars if they continue to make their mortgage, home equity, and auto payments. They could eliminate their credit card debts, medical bills, and any other unsecured loans.To be able to file for Chapter 13, Adam must be able to prove to the Bankruptcy Court that he makes enough income each month to not only repay a portion of his debts (including the mortgage arrears), but also to maintain his household necessities for himself and his dependent daughter. Even though Adam is making less money, he still may be able to afford a repayment plan, because he will only have to pay a small percentage of his credit card debt back.

Hypothetical #4: Dennis and Pam Filer

Dennis and Pam Filer are a married couple with three dependent sons in their household. Pam makes $25,000 a year from a part-time job. Dennis’ income fluctuates, but he typically makes around $90,000 a year. Dennis and Pam own a house in a middle-class suburb and they have 2 cars. They are currently up-to-date on their house and car payments. Earlier this year, one of their sons became ill and they’ve been fighting with the insurance company over who’s responsible for the medical bills. They have also slowly over-extended themselves on their credit card debt over the last 5 years. The credit card companies have consistently increased their credit limits and their balances have increased proportionately each year. Dennis and Pam are living on a razor-thin budget and would like to lower the interest rates on their credit cards and start paying back the principal of the debts they incurred. They have owned their house for over 10 years and have a large amount of equity built up, but they aren’t eligible for a refinance because their debt-to-income ratio is too high.


A Chapter 13 bankruptcy would allow Dennis and Pam to consolidate all of their debts into one monthly payment. Assuming Dennis and Pam are over the median income for a family of five in the state in which they live; their Chapter 13 Repayment Plan would run for a length or five-years. By filing a Chapter 13, Dennis and Pam will prevent any additional interest fees or penalties been added to their debt. Dennis and Pam will most likely pay a reduced percentage of the total debt they owe over the five-year period and the rest of their debt will be forgiven in the Chapter 13 discharge. Dennis and Pam will not risk losing any of their assets, and will be able to keep their house, cars, and household belongings.

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