Colorado Chapter 13 Bankruptcy: The Repayment Plan

Chapter 13 is a court-supervised repayment plan: 3 years if your income is below the state median, up to 5 years if at or above the median, and never longer than 5 years (11 U.S.C. § 1322(d), § 1325). It lets people cure a mortgage or car default and keep their property.

This is general information, not legal advice. Whether Chapter 13 fits your situation depends on your income, debts, and goals — talk to a Colorado bankruptcy attorney.

Chapter 13 is a court-supervised repayment plan for people with regular income. Instead of liquidating property, you repay some or all of your debts over time and keep what you own.

How long the plan lasts

The length of the plan depends on your income relative to the Colorado median:

3 years if your income is below the state median.
Up to 5 years if your income is at or above the median.

By law, no plan can exceed 5 years (11 U.S.C. § 1322(d), § 1325).

Curing a default and keeping property

Chapter 13’s biggest advantage is that it lets you cure a mortgage or car default — catch up on missed payments over the life of the plan — while keeping the property (11 U.S.C. § 1322). This is why people facing foreclosure or repossession often choose Chapter 13 over Chapter 7.

Chapter 13 and Colorado exemptions

Colorado’s exemptions still matter in Chapter 13: they affect how much unsecured creditors must be paid under the plan. See the Colorado exemptions guide for the homestead, vehicle, and other figures (confirm current).

The automatic stay still applies

Filing Chapter 13 triggers the automatic stay, immediately halting most collection while your plan is in place. See Automatic Stay & Discharge.

To get matched with a local Colorado bankruptcy attorney, connect with a lawyer.

Frequently asked questions

How long does a Chapter 13 plan last?

Three years if your income is below the Colorado median, and up to five years if it is at or above the median. No plan can exceed five years (11 U.S.C. § 1322(d), § 1325).

Can Chapter 13 stop a foreclosure or repossession?

Yes. Chapter 13 lets you cure a mortgage or car default over the life of the plan while keeping the property, as long as you keep up with plan payments (11 U.S.C. § 1322).

How is Chapter 13 different from Chapter 7?

Chapter 7 discharges most unsecured debt quickly with no repayment plan; Chapter 13 is a 3- to 5-year repayment plan that lets you catch up on secured debts like a mortgage or car and keep the property.

Related guides

Chapter 7 Bankruptcy in Colorado Chapter 7 is liquidation bankruptcy: a trustee can sell nonexempt property to pay creditors, and the individual debtor receives a discharge of most unsecured debts (11 U.S.C. § 727). It requires the means test and credit counseling. Because Colorado's exemptions protect typical assets, most Colorado filers keep their property.

Colorado Bankruptcy Exemptions Colorado opted out of the federal bankruptcy exemptions (C.R.S. § 13-54-107), so Colorado filers use Colorado exemptions. Key protections include a homestead up to $250,000 (or $350,000 if elderly or disabled), a motor vehicle up to $15,000 (or $25,000 if elderly or disabled), household goods, clothing, tools of the trade, and limits on wage garnishment. Several figures were raised in 2022; confirm current.

The Automatic Stay & Discharge in Colorado Filing bankruptcy triggers the automatic stay (11 U.S.C. § 362), an immediate halt to most collection — lawsuits, wage garnishment, repossession, and foreclosure. A discharge (11 U.S.C. § 524, § 727) permanently bars collecting discharged debts, but some debts are non-dischargeable (11 U.S.C. § 523), including most recent taxes, student loans absent undue hardship, child support and alimony, and debts from fraud.

The Chapter 7 Means Test in Colorado The Chapter 7 means test (11 U.S.C. § 707(b)) compares your income to the median income for your household size in Colorado. Below median you generally qualify for Chapter 7; above median, a disposable-income calculation may create a presumption of abuse. Colorado median-income figures are updated periodically by the U.S. Trustee.

Chapter 13 Bankruptcy in Colorado