Ch.7 Exemptions
| Property | Federal |
|---|---|
| Homestead | $27,900 |
| Vehicle | $4,450 |
| Retirement | Fully exempt |
Ch.13 Advantages
- Cure mortgage arrears
- Cure car loan arrears
- Cramdown car loans 910+ days
- Keep non-exempt assets
Chapter 13 is the stronger choice for homeowners behind on their mortgage. You can cure the entire arrearage over the life of your 3-5 year plan while continuing to make regular mortgage payments going forward. The automatic stay halts foreclosure immediately upon filing, giving you time to get current.
For car loans, Chapter 13 offers the "cramdown" option on vehicles purchased more than 910 days before filing. The court reduces the secured claim to the vehicle's current market value rather than the loan balance. If you owe $15,000 on a car worth $8,000, your plan only needs to pay the $8,000 secured portion (plus interest). The remaining $7,000 is treated as unsecured debt and may be partially or fully discharged. Lien stripping may also be available for underwater second mortgages in some circuits.
Comparison
| Scenario | Ch.7 | Ch.13 |
|---|---|---|
| Home within exemption | Keep | Keep |
| Home behind on mortgage | Cannot cure | Cure in plan |
| Car behind on loan | Reaffirm/surrender | Cure in plan |
Related
Last updated: March 2026. Not legal advice.
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