You do not start searching “questions Chapter 13 Fresno” because you are curious about the law. You search it when the mortgage company is calling, your paycheck is at risk, or you are lying awake, wondering how much longer you can juggle bills. Maybe a friend or another lawyer mentioned Chapter 13, and now you want straight answers before things get worse.
In Fresno, most people who ask about Chapter 13 are dealing with very real, very immediate pressure. A foreclosure sale date has been set, a car is on the verge of repossession, or a wage garnishment is already hitting every paycheck. You may have been told that you “make too much” for Chapter 7, or that filing bankruptcy means you will never recover financially, and you need to know what is actually true for someone in your position.
At Fear Waddell, P.C., we focus solely on bankruptcy law here in Fresno, and our attorneys, Peter Fear and Gabe Waddell, are Certified Bankruptcy Specialists recognized by the State Bar of California. We have filed over a thousand bankruptcy cases, including many Chapter 13 plans for people who needed to stop a crisis and protect what mattered most. In this guide, we will walk through the top questions we hear about Chapter 13 in Fresno and give you the practical answers we share in our own conference room.
Get answers to common Chapter 13 questions Fresno families ask—learn how to protect your home and stop garnishments. Call (559) 418-3022 now or reach out online.
Question 1: What Is Chapter 13 and How Does It Work in Fresno?
Chapter 13 is a type of bankruptcy that lets you create a court-approved repayment plan based on what you can actually afford, not what your creditors demand. Instead of wiping out debts quickly like Chapter 7, Chapter 13 stretches certain payments out over three to five years through a single monthly plan payment. For many Fresno residents, it is a way to keep a home, catch up on a car, or deal with taxes while still earning a regular income.
When you file a Chapter 13 case in the Fresno division of the bankruptcy court, something powerful happens immediately. An automatic stay goes into place, which is a legal freeze that generally stops foreclosures, repossessions, wage garnishments, and most lawsuits. You then propose a written plan that lays out how you will pay different categories of debt over time. A Chapter 13 trustee reviews that plan, creditors have a chance to object, and a bankruptcy judge decides whether to confirm the plan.
Your plan payment is not a random number. It is built primarily from your income and reasonable living expenses, along with rules about how certain debts must be treated. In a typical Fresno case, we look at your paystubs, family size, mortgage or rent, car payments, insurance, utilities, and other basics, then calculate what is left over. That leftover amount, along with the value of any non-exempt property, usually shapes your monthly plan payment.
Because our practice at Fear Waddell, P.C. is devoted only to bankruptcy work, we are familiar with how the local trustee and court view budgets and plan terms. That local experience matters. What might sound reasonable on paper can raise questions in a Fresno courtroom if it does not line up with what judges and trustees usually see. Part of our job is to help you propose a plan that fits both your real life and the expectations of the Fresno bankruptcy system.
Question 2: Do I Have to Pay All My Debts Back in Chapter 13?
One of the biggest myths we hear in Fresno is that Chapter 13 always means paying every dollar of your debt back over five years. That is not how the law works for many people. In a significant number of Chapter 13 bankruptcy cases, unsecured creditors, like credit card companies and medical providers, receive only a portion of what is owed, and the rest is discharged at the end of a successful plan.
Your plan payment is driven by a few main factors. First, we calculate your disposable income, which is the money left after reasonable monthly living expenses, such as housing, food, transportation, insurance, and medical costs. Second, we look at the value of any non-exempt property you own, like equity in a home or vehicle beyond what California exemptions protect. Third, we must consider priority debts, such as recent income taxes or past-due child support, which usually must be paid in full through the plan.
Different types of debts are treated differently. Secured debts are tied to property, such as a mortgage on your home or a loan on your car. In Chapter 13, you typically keep paying the ongoing mortgage or car payment and use the plan to catch up on what you are behind. Unsecured debts, such as credit cards, medical bills, and many personal loans, share what is left over after secured and priority debts are taken care of. In a typical Fresno case, unsecured creditors might receive anywhere from a small percentage to a larger share, depending on income and assets.
Here is a simple example. Imagine a Fresno couple who are behind $18,000 on their mortgage and have $40,000 in credit card and medical debt. After we build a realistic budget, we determine that they can afford $700 per month for a 60-month plan. That $700 per month, plus trustee and attorney fees included in the plan, first pays the $18,000 mortgage arrears and any required priority debts. Whatever remains goes to unsecured creditors. At the end of the plan, any unpaid balance on qualifying unsecured debts is discharged, even though the couple did not pay those in full.
In the many Chapter 13 cases we have handled at Fear Waddell, P.C., we see the same misunderstanding about paying everything back. The reality in Fresno is more nuanced. The law requires you to pay what your budget and property situation support, and that amount is often less than the full unsecured debt. Our role is to apply those rules to your exact numbers so you know what a plan in your case would likely require before you commit to it.
Question 3: Can Chapter 13 Really Stop Foreclosure, Repossession, and Garnishments?
For many people in the Central Valley, the most urgent question is whether Chapter 13 bankruptcy can stop what is about to happen this week, not what might happen to their credit next year. If you are facing a trustee sale date on your Fresno home, a pending car repossession, or a wage garnishment that is shrinking every paycheck, the automatic stay in Chapter 13 can provide immediate breathing room in many situations.
When we file a Chapter 13 case, the automatic stay typically takes effect right away. Mortgage companies generally must put foreclosure activity on hold. Auto lenders usually must stop repossession efforts. Employers who are honoring garnishment orders generally must stop sending a portion of your wages to the creditor. The timing can be critical, especially with scheduled foreclosure sales, which is why we often discuss filing sooner rather than waiting until the last possible day.
Stopping a foreclosure is not the end of the story, though. Chapter 13 gives you a structure to cure and maintain your mortgage. That means you use the plan to pay back the past-due amount, known as arrears, over the life of the plan, while you resume making your regular monthly mortgage payment going forward. For example, if you are $24,000 behind, that amount might be spread over 60 months, which is $400 per month through the plan, in addition to your normal mortgage payment paid directly to the lender.
Chapter 13 bankruptcy can also help with vehicles. If your car has not yet been repossessed, the automatic stay usually prevents the lender from taking it once the case is filed. In some situations, we can restructure the way the car loan is paid through the plan. If a vehicle was recently repossessed, it may sometimes be possible to get it back by filing quickly and meeting certain conditions, although that depends on timing and other details. Wage garnishments from most consumer debts generally stop once the stay is in effect, which can free up income needed to fund your Chapter 13 plan.
There are limits. Chapter 13 does not stop some types of actions, such as criminal matters and certain family law issues, and garnishments for current child support may continue. That is why we review your specific situation carefully before recommending a filing strategy. At Fear Waddell, P.C., we regularly file Chapter 13 cases in Fresno when a foreclosure sale or garnishment is looming, and our familiarity with local procedures helps us move quickly and realistically in time-sensitive situations.
Question 4: How Much Will My Chapter 13 Payment Be and How Long Will It Last?
Once people understand that Chapter 13 can stop collection actions, the next worry is simple and practical. They want to know what the monthly payment will look like and how long they will be in the plan. While we cannot tell you an exact number without seeing your income and expenses, we can explain how payments and plan length are usually determined in Fresno cases.
Most Chapter 13 plans run between three and five years. If your income is below a certain median level for a household of your size, you may be able to propose a three-year plan. If it is above that median, the law generally expects a five-year commitment period. Many Fresno families end up with five-year plans because that length allows arrears and other required debts to be spread out more comfortably, which can make the monthly payment lower.
The starting point for your plan payment is your budget. We look at your actual income from wages, self-employment, or other sources, then subtract reasonable monthly expenses. That includes housing, utilities, transportation, food, insurance, childcare, and similar necessities. The amount left is your disposable income, which is a key driver of your plan payment. We also factor in what must be paid through the plan, such as mortgage arrears, certain tax debts, past-due support, and any required minimum to unsecured creditors based on your assets.
Here is an example. Suppose a Fresno family brings home $5,200 per month and has $4,300 in reasonable monthly expenses, including a regular mortgage and car payment. That leaves $900 per month of disposable income. If they are $15,000 behind on their mortgage and owe $8,000 in recent taxes, we would map out a plan where that $900 per month over 60 months helps cure the arrears and pay the taxes, with remaining funds spread among unsecured creditors. Those creditors might receive only a portion of what they are owed, with the rest discharged at the end.
Life does not freeze for three to five years, and Chapter 13 recognizes that. If your income goes up or down significantly during the plan, it may be possible to ask the court to modify your payment, or in some cases to convert to another chapter or seek an early discharge based on hardship. The court will look carefully at the numbers, which is why we encourage clients to keep us updated as their situation changes. At Fear Waddell, P.C., we do not just plug your income into a formula. We build a detailed budget with you and test different plan scenarios so that what we propose is both realistic for your family and acceptable to the Fresno trustee and court.
Question 5: Will I Lose My House, Car, or Other Property in Chapter 13?
The fear of losing a home or vehicle often keeps people from even considering bankruptcy. In reality, Chapter 13 is often used precisely because it can protect important property that might be at greater risk in Chapter 7. For many Fresno residents, Chapter 13 is the tool that lets them keep a roof over their family and the car they need to get to work.
In Chapter 13, you generally keep your assets as long as you follow the plan and keep up with ongoing obligations. If you are behind on your mortgage, the plan is structured to catch up the arrears while you resume current payments. If your car is behind, the plan can spread out the past-due amount, and in some cases, adjust how the loan is paid. Because you are proposing a repayment structure, the court is usually not liquidating your property the way it sometimes can in Chapter 7.
Equity still matters, though. Equity is the value of your property above what you owe on it. California exemption laws protect a certain amount of equity in your home, vehicles, and other property. If you have more equity than those exemptions cover, Chapter 13 often requires that your plan pay unsecured creditors at least as much as they would receive if a Chapter 7 trustee sold that non-exempt property. In practice, this means that higher equity can increase the minimum that must go to unsecured creditors, even though you may still keep the property itself by making plan payments.
Consider a Fresno homeowner with a house worth more than the mortgage and a car that is paid off. In Chapter 7, a trustee might look closely at that non-exempt equity and consider selling an asset. In Chapter 13, we can often structure a plan that lets the homeowner keep both the house and the car, as long as the plan pays a required minimum to unsecured creditors over time. The tradeoff is that your monthly payment might be higher than in a case with less equity, but your property stays with you if you honor the plan.
Our lawyers are recognized by the State Bar of California as Certified Bankruptcy Specialists, and we pay close attention to California exemption rules and how the Fresno court and trustees apply them. Before you decide whether to file Chapter 13, we walk through your home value, loan balances, car values, and other property in detail. That way you understand what is protected, what might affect your minimum plan payment, and how Chapter 13 can be used to keep the assets that matter most to you.
Question 6: How Will Filing Chapter 13 Affect My Credit and Future Finances?
Worry about credit and long-term financial health is often the last barrier to deciding on Chapter 13. Many people in Fresno assume that filing means they will never qualify for a loan again or that they will be marked for life. The truth is more measured. Chapter 13 does show up on your credit report for years, but it also stops the steady damage from late payments, charge-offs, and judgments that may already be dragging your score down.
Chapter 13 can remain on a credit report for several years after filing. That does not mean you cannot rebuild while the case is open or after it ends. We regularly see people begin to improve their credit during and after a Chapter 13 by paying all required obligations on time, keeping new credit use modest and controlled, and maintaining a stable budget. Creditors also look at your recent history, so a record of consistent payments during a plan can be more meaningful than a long list of uncollected debts.
The early impact on your credit score can be a drop, especially if you previously had high scores. However, if you are already behind on multiple accounts, dealing with collections, or facing judgments, your credit may already be significantly damaged. In that situation, Chapter 13 can serve as a turning point. It stops new negative reports on the debts that are included in the case and gives you a framework to get current on secured debts, like a mortgage or car.
There is also a practical benefit that does not show up as a number. Living within a Chapter 13 budget for three to five years forces you to track spending, plan for known expenses, and build new habits around money. At Fear Waddell, P.C., we see clients emerge from successful plans with a much clearer picture of their finances and a better sense of how to avoid the patterns that led to trouble in the first place. Our approach is not just about getting you through the court process. It is about helping you understand what life after Chapter 13 can look like and how to position yourself for a healthier financial future.
How to Know If Chapter 13 Is the Right Move for You in Fresno
Chapter 13 is not the right answer for everyone, but it can be a powerful option in the right circumstances. In Fresno, we often see Chapter 13 work well for people who are behind on a mortgage or car but have a steady income, who owe taxes that cannot be fully wiped out in Chapter 7, or who have assets they want to protect that might be at risk in a straight liquidation. If you are looking for a way to stop a foreclosure, catch up on critical debts, and organize the rest of your obligations into one structured payment, Chapter 13 is worth a serious look.
At the same time, there are situations where Chapter 7, Chapter 11, or even a non-bankruptcy solution may be a better fit. Choosing the right path depends on your income, your property, the type and amount of your debts, and what you want your life to look like in a few years. Online information can help you frame the issues, but it cannot plug in your exact numbers, your family's needs, or the way the Fresno bankruptcy court tends to handle cases like yours. That comparison is what we do every day.
If you see your situation in any of the examples we have discussed, the next step is straightforward. Gather your recent pay stubs, tax returns, a list of your debts, and basic information about your home and vehicles, then set up a time to talk with us. We will walk through your options under Chapter 13, Chapter 7, and any other realistic paths, so you can decide with clear, Fresno-specific information rather than guesswork.