What to Do If You Can't Afford Chapter 13 in California?

Chapter 13 bankruptcy repayments are often unaffordable to someone with limited money (e.g., just over the median income level) but you can make it work. Request lower payments, cut non-essential expenses, extend the plan to 5 years or apply for a hardship modification to make things more manageable. Whereas with quick planning and proper budgeting, you can manage Chapter 13 payments even when money is tight.

When you file bankruptcy, you would have to undergo the means test to see if you’re eligible for either Chapter 7 or 13. If you have enough income to clear the debt with a reorganized repayment plan over 3–5 years, Chapter 13 is the better fit for you.

This distinction seems easy to comprehend on paper but in reality, it is more grey than black and white. However, if you qualify for Chapter 13 bankruptcy, limited funds can make the process uncomfortable and stressful for you.

We have seen this problem stump a lot of clients who are proceeding with this solution. If you are wondering how to file Chapter 13 with no money left to spare, you are at the right place!

Can You Afford Chapter 13 Bankruptcy?

The means test is a logical and quantitative measure to check if someone can realistically make their debt payments.

Let us go through an example to understand it better.

John is a single man in his 20s-30s living alone in California, earning $6,400 per month, which is $76,800 p.a. The median income for single filers in California is $76,190 as of May 2025 (the value can vary by county).

As per the rules, John will likely not qualify for Chapter 7 bankruptcy in California as he barely crosses the minimum median income level. He would have to take the means test for Chapter 13 bankruptcy next.

Here’s a rough calculation of how that might go:

Since John has around $1,000 available per month as per this calculation, the bankruptcy court will likely consider that he’ll have the ability to pay off at least some of the debt. So, technically speaking, John is eligible for Chapter 13 bankruptcy but not Chapter 7.

What's the real-world problem?

Having a disposable income of $1,000 per month means that, in theory, you can cover the required payments without a significant impact on your life. But when we zoom out to consider the real-world factors, Californians deal with many issues:

• Irregular working hours
• Sudden hike in rent or household costs for reasons out of their control
• Out-of-pocket expenses for child care or medical costs
• Living paycheck-to-paycheck in general

So, a person may technically pass the means test but still find it unaffordable to meet the payment requirements.

[Disclaimer: The estimation in this example uses standard deductions and general living costs in California. The actual calculation can differ case by case. Check out how you'll do in the means test for Chapter 7 or 13 Bankruptcy with personalized valuations.]

What Am I Paying for if I Choose Chapter 13 Bankruptcy?

The monthly payment you'll need to make under Chapter 13 bankruptcy will not solely go towards repaying your creditors. There are more variables involved. The breakdown typically includes:

High-priority debts like child support, taxes, etc

• Attorney fees
• Trustee fees
• Secured debts (car loans/mortgages)
• Unsecured debts (credit cards, personal loans, medical bills)

How much will my monthly payment be for Chapter 13 bankruptcy?

There is no standard monthly payment that debtors need to pay towards Chapter 13 bankruptcy. The actual amount varies based on individual circumstances and key factors under federal bankruptcy law.

Income thresholds:

Your household income determines your Chapter 13 plan length:

• 1 person: $76,190/year ($6,349/month)
• 2 people: $99,936/year ($8,328/month)
• 3 people: $112,536/year ($9,378/month)
• 4 people: $130,845/year ($10,904/month)

Below median: 3-year plan

Above median: 5-year plan

Trustee Fees

These are a percentage of the filer’s monthly plan payments capped by the U.S. Trustee. California Chapter 13 trustee fees by district:

• Central – 10%
• Eastern – 8.7%
• Northern – 10%
• Southern – 10%

Court Filing Fee

Flat $313 total ($235 filing + $78 admin), usually included in your repayment plan.

How to Make Chapter 13 Bankruptcy More Affordable in California?

Yes, on paper, it can seem that making the payments per month will get extremely complicated over time. While people may ask how to file chapter 13 with no money, it's important to note that the process isn’t completely free. You still need to have disposable income to make the repayments, even if barely meeting the requirements. But you can make it more manageable.

Request decreased repayment amount

The bankruptcy court bases its approval of the repayment plan for bankruptcy 13 filers on the means test calculation against their typical necessary living expenses and income. But if the calculation seems unreasonable, filers can talk to their trustee or attorney to submit a revised budget. (Learn more about California’s bankruptcy exemption laws.)

If the proposed repayment plan is not something you can afford realistically, request a revision. Provide accurate up-to-date information regarding:

• Health costs, childcare or commuting costs
• Rising utility bills and rent
• Proof of seasonal work or irregular income

Make your documentation detailed and very specific. It will strengthen your case for payment revision.

Revise the plan duration

One good thing about what is Chapter 13 bankruptcy is that one can make repayments over 3-5 years. If you feel that the repayments set for the 3-year-plan version are a bit too steep, you can request a timeline revision. Extend the duration to 5 years and that will reduce what you will owe per month significantly.

Safely rework eligible non-essential expenses

You can try cutting out non-essential expenses to make it easier for you to make these repayments.

• Adjust your discretionary expenses such as entertainment (e.g., attending events), takeout and luxury items.
• Downgrade or pause subscriptions to sites like Netflix, Hulu.
• Consult with your attorney if you can defer payments that are not covered under bankruptcy legally without impacting your plan.

This can give you some breathing room in your budget.

Utilize automatic reminders

If you miss any payments, it can negatively impact your bankruptcy plan and even result in fees or dismissal. Avoid this trouble entirely by setting up automatic payments through your trustee's portal or bank. If the automation method isn't working for you, use budgeting apps or set calendar reminders to keep track of payment dates.

Apply for hardship modification

Certain circumstances, like a pay cut due to financial troubles in the company, job loss or medical emergencies, don't come knocking on the door. They typically come barging in.

When you're struggling to make ends meet while keeping up with debt repayment, that can feel like too much pressure. Luckily, you can apply for a hardship modification from the bankruptcy court in California if such a situation strikes. Doing this can:

• Reduce your due payments temporarily
• Extend repayment duration
• Possible hardship discharge if you have completed a lot of the dues and are genuinely unable to continue (rare but possible)

Discuss with your attorney if this is possible with your case.

Available Resources and Help in California

How do you file Chapter 13 bankruptcy with no money or limited resources while you're already struggling with other priorities? Chapter 13 filers in California can access many free and low-cost resources, both at the state and federal levels.

What Are the Alternatives for Chapter 13 Bankruptcy?

Even after trying such resources, some people still find it difficult to handle Chapter 13 bankruptcy repayments long-term. If you are in the same boat as them, you can try the alternatives we typically suggest to such filers:

Modify the Chapter 13 Plan (§1329 Adjustment)

You can request the court to modify your repayment plan for Chapter 13 bankruptcy if you’ve experienced some big expenses or suffered financial losses. Common adjustments include:

• Decreasing monthly payments to fit your current disposable income.
• Temporarily pausing payments.
• Extending repayment term (up to a maximum of 60 months from the original filing date) to make the repayments easier.

If you’re already on a five-year plan and your situation has not improved, then Chapter 7 bankruptcy might be a better fit.

Re-try for Chapter 7 Bankruptcy

Check again if you qualify for Chapter 7 bankruptcy if you’re earning less now. You might pass the means test if your current income falls below the median level. Things to recheck first:

• Take another means test with the up-to-date average income for the last six months. If you earn less than before, the re-test will show that you qualify as per updated calculations.
• Review allowed expenses to see if you missed any during the first check, like insurance deductions, child care costs, etc.
• Highlight special circumstances like unavoidable emergency costs.
• Surrender your secured assets like a car or house if it's draining your money and apply for Chapter 7 to discharge leftover unsecured debt.

Conclusion

Bankruptcy is not an easy feat. We understand how stressful the situation is and going through the process on top of other responsibilities feels extremely heavy. That being said, the whole purpose of Chapter 13 bankruptcy is to give people a lifeboat—a chance to rebuild their finances.

Struggling to make these repayments is a reality for many Californians. You’re not alone in this. Talk to your bankruptcy attorney and financial advisor to understand your options. There are strategies and resources available in California that you can turn to for help in your journey towards financial recovery.

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