What Percentage of Chapter 13 Bankruptcies Are Denied?

What Percentage of Chapter 13 Bankruptcies Are Denied?

Outright denials of a Chapter 13 petition are extremely rare (typically under 1 %), but a substantial majority of filed cases are later dismissed or fail to complete the repayment plan—meaning your risk is less at filing and more during the 3- to 5-year process.

Statistics show that the rate of successful completion for Chapter 13 cases is generally around 30-40%. This means a majority of cases, roughly 60-70%, are dismissed at some point during the three-to-five-year plan, often due to missed payments or procedural errors. The overall failure rate of Chapter 13 cases can be as high as 61%.

 

What the Data Actually Shows

Here are the most reliable national figures:

Metric	Approximate Rate	Source / Notes
Outright petition denial (i.e., case never proceeds)	< 1 % (rare)	No single reliable national figure, but anecdotal.
Case closures by plan completion (i.e., debtor receives discharge)	~ 49 % in 2020 for Chapter 13 consumer cases.	The United States Courts report from 2020: 110,632 of 226,777 Chapter 13 consumer cases closed by completion.
Dismissal (pre- or post-confirmation)	~ 51 % of closures were dismissals in 2020.	In 2020: 116,145 dismissals out of 226,777 cases closed.
Estimated “successful completion” rate (discharge)	~ 35-40 % frequently cited for older data.	For example, a 2007-2013 study found about 35 % of filings resulted in discharge.

Bottom line: While your statement that “60-70% are dismissed” is broadly consistent with older studies (e.g., 52 % dismissed before confirmation + 27 % dismissed afterward) more recent data suggests the completion (discharge) rate is closer to 49 % for consumer cases in 2020.

 

Clarifying Important Terms

It’s critical to differentiate:

• Denial: The court refuses to confirm a plan or dismisses a petition at or before confirmation – this is rare, with approximately 0.4% of Chapter 7 and Chapter 13 cases dismissed due to denial.
• Dismissal: The case is closed without discharge, frequently due to missed payments, procedural failures, conversion, etc.
• Completion/Discharge: The debtor successfully pays the plan and receives a discharge of eligible debts.

When discussing “What percentage are denied?” you should clarify whether you mean denied at the outset (very low) or dismissed over time (much higher).

 

 

What “Denied” Really Means in Chapter 13

In bankruptcy, “denied” doesn’t always mean “rejected at the start.”
Denial can refer to:

1. Petition Denied: The court refuses to allow your case to proceed, usually for ineligibility, bad-faith filings, or procedural errors such as missing tax returns or exceeding debt limits.
2. Plan Not Confirmed: The judge rejects the repayment plan as unfeasible or incomplete.
3. Dismissed Later: You start the plan but fail to finish it—by far the most common outcome.

Understanding these differences helps you focus on what matters: creating a plan that passes confirmation and remains affordable long-term.

 

How Chapter 13 Plan Confirmation Works

Once you file, you’ll propose a repayment plan that reorganizes your debts over 36–60 months. The plan must meet several legal and financial tests before the judge confirms it:

1. Feasibility Test – You must show you can make the payments with regular income.
2. Disposable Income Test – You must devote all disposable income toward repayment.
3. Best Interests Test – Creditors must receive at least as much as they would in Chapter 7.
4. Good Faith Requirement – You must file honestly and without intent to abuse the system.

If your plan satisfies these standards and you stay current on payments, it’s likely to be confirmed.

 

Why Chapter 13 Cases Get Denied or Dismissed

Even well-intentioned filers can run into problems. The most common causes include:

• Missed Plan Payments: The top reason for dismissal.
• Incomplete or Late Paperwork: Missing tax returns, pay stubs, or schedules can derail the case.
• Unrealistic Budgets: Plans that don’t reflect actual income and expenses fail feasibility tests.
• Income Loss or Job Change: A sudden drop in income makes plan payments impossible.
• Failure to Attend Hearings or Meet Deadlines: Trustees may move to dismiss if requirements aren’t met.
• Filing Without an Attorney: Pro se cases have extremely low success rates.
• Exceeding Debt Limits or Dishonesty: Cases may be denied if debt limits are surpassed or if fraud is detected.

• Missed Plan Payments: The top reason for dismissal.
• Incomplete or Late Paperwork: Missing tax returns, pay stubs, or schedules can derail the case.
• Unrealistic Budgets: Plans that don’t reflect actual income and expenses fail feasibility tests.
• Income Loss or Job Change: A sudden drop in income makes plan payments impossible.
• Failure to Attend Hearings or Meet Deadlines: Trustees may move to dismiss if requirements aren’t met.
• Filing Without an Attorney: Pro se cases have extremely low success rates.

Tip: Stay proactive. Communication and documentation prevent most dismissals before they happen.

 

How to Improve Your Odds of Plan Approval and Completion

Success in Chapter 13 comes down to three words: plan, proof, and persistence.

1. Plan Realistically

• Propose a payment amount you can truly afford.
• Account for living expenses, taxes, and emergencies.
• Build a small buffer—don’t promise every extra dollar to creditors.

2. Provide Proof

• File every required document on time.
• Keep pay stubs, bank statements, and tax returns organized.
• Respond promptly to trustee requests or objections.

3. Persist Until Discharge

• Set up automatic payments or payroll deductions.
• Contact your attorney immediately if you expect a shortfall.
• Request a plan modification if your income or expenses change.

With consistency and preparation, most dismissal risks can be avoided.

 

Common Legal Tests Explained

Confirmation Test	Core Question	Bankruptcy Code Reference
Feasibility	Can the debtor realistically make the proposed payments?	§ 1325(a)(6)
Disposable Income	Is all disposable income going toward the plan?	§ 1325(b)
Best Interests	Will unsecured creditors get at least the Chapter 7 equivalent?	§ 1325(a)(4)
Good Faith	Was the plan proposed honestly and transparently?	§ 1325(a)(3)

Meeting these requirements not only gets your plan confirmed—it keeps you compliant throughout the repayment period.

 

What Happens if the Judge Denies Confirmation

If your plan is denied, you’ll typically receive an opportunity to fix it. The court may:

1. Allow you to amend and resubmit the plan.
2. Convert the case to Chapter 7 if you qualify.
3. Dismiss the case entirely if no feasible plan exists.

Denial doesn’t always mean failure. Many successful cases start with an initial rejection followed by an amended plan that meets the Code’s standards.

 

When to Amend, Convert, or Refile

You may need to consider one of these options if your finances shift:

• Amend the Plan if income changes or a creditor objects.
• Convert to Chapter 7 if repayment is no longer sustainable.
• Refile Later if your case is dismissed and circumstances improve.

Each option has implications for your credit and future eligibility, so speak with a qualified bankruptcy attorney before taking action.

 

How Long Chapter 13 Usually Takes

A typical plan lasts three to five years. Shorter terms are available if your income is below the state median. The time frame includes:

1. Filing and confirmation (about 2–4 months)
2. Plan execution (36–60 months)
3. Final discharge and case closure

Insight: A five-year plan often lowers monthly payments, but it also increases the risk of dismissal. Choose the term that balances affordability and completion.

 

Who Is Eligible to File Chapter 13

You may file if:

• You have regular, verifiable income.
• Your secured and unsecured debts fall within the limits set by law.
• You are current on tax filings and complete a credit-counseling course.
• You are not a business entity (only individuals can file).

Those with stable jobs, mortgage arrears, or valuable assets to protect are ideal candidates for Chapter 13 relief.

 

Top Red Flags That Trigger Trustee Objections

• Negative disposable income after expenses.
• Omission of assets, side income, or luxury purchases.
• Unpaid priority debts such as taxes or support obligations.
• Failure to list or value secured collateral correctly.
• Missing credit-counseling certificate before filing, which is a mandatory requirement for Chapter 13 bankruptcy.

Tip: Accuracy and transparency are everything. Small inconsistencies often create large problems in Chapter 13.

 

How to Raise Your Chapter 13 Success Rate

1. Hire Experienced Counsel. Representation can double or triple your chance of plan confirmation and discharge, as filing without a qualified attorney drastically reduces the chances of success in Chapter 13.
2. Budget Conservatively. Leave room for life’s surprises; overly tight plans fail fastest.
3. Stay Organized. Keep all correspondence, receipts, and notices.
4. Communicate Early. Tell your attorney about any financial change before you miss a payment.
5. Stay Engaged. Attend all hearings and complete post-filing courses promptly.

Takeaway: Chapter 13 success is built month by month through discipline and teamwork with your attorney.

 

Top Issues That Trigger Objections

• Budget shows negative disposable income after reasonable expenses.
• Priority or secured claims (taxes, arrears, car loans) are not fully and properly provided for.
• Missing pay stubs, tax returns, or credit counseling certificate.
• Unrealistic income assumptions or unverified side income.
• Bad‑faith indicators (inaccurate schedules or recent luxury spending).
• Failure to complete a credit counseling course before filing can also lead to denial.

 

Confirmation Tests You Must Satisfy

Test	What It Asks	Key Statute
Feasibility	Can you make all payments on time?	11 U.S.C. § 1325
Disposable Income	Are you committing projected disposable income?	§ 1325(b)
Best Interests	Will unsecured creditors receive at least the Chapter 7 value?	Chapter 13 Code

For foundations, see U.S. Courts: Chapter 13 Basics, Cornell LII § 1325, Federal Rules of Bankruptcy Procedure, and U.S. Trustee Program.

 

 

Talk With A Bankruptcy Attorney Today

Questions about plan objections or confirmation strategy? Call 706-548-7070. We help filers nationwide navigate trustee requirements and hearings while protecting income and assets. National support.

Our practice focuses on consumer bankruptcy and debt relief. This article cites official sources including the U.S. Courts and the Bankruptcy Code to help you understand confirmation standards. For guidance tailored to your facts, contact our team for a consultation.

 

Frequently Asked Questions

What Percentage of Chapter 13 Bankruptcies are Denied?

There is no single nationwide statistic published for “denials.” Courts decide case‑by‑case. Most setbacks stem from feasibility problems, missing documents, or noncompliance with 11 U.S.C. § 1325. Address trustee objections early and amend promptly to improve confirmation odds.

How Do Judges Decide Whether To Confirm A Chapter 13 Plan?

Judges apply 11 U.S.C. § 1325 and the Federal Rules of Bankruptcy Procedure. The plan must be feasible, proposed in good faith, pay required priority and secured claims, and satisfy the best‑interests and disposable‑income tests.

Can I Fix A Denied Chapter 13 Plan?

Often, yes. Courts may allow amendments to adjust payment amounts, cure filing defects, or better provide for secured and priority claims. If problems persist, you may convert to Chapter 7 or consider refiling after dismissal.

What Causes Chapter 13 Cases To Be Dismissed?

Common causes include missed plan payments, failure to file tax returns or pay stubs, unrealistic budgets, and not addressing trustee objections. Local rules may impose strict deadlines for these items.

Is Conversion From Chapter 13 To Chapter 7 Possible?

Yes. If income drops or the plan becomes infeasible, many debtors can convert to Chapter 7 if they qualify. Your attorney can evaluate exemptions, eligibility, and potential impacts on assets before converting.

How Long Does Chapter 13 Take?

Most plans run three to five years, depending on income and other factors. The case may end sooner if you pay all allowed claims early or obtain a hardship discharge in limited circumstances.

Resources

• U.S. Courts – Chapter 13 Bankruptcy Basics
• 11 U.S.C. § 1325 (Confirmation of Plan)
• GovInfo – U.S. Code Title 11, Chapter 13
• Federal Rules of Bankruptcy Procedure
• U.S. Trustee Program

Further Reading

• How Long Does Chapter 13 Bankruptcy Last In Georgia?
• Can You Be Evicted While In Chapter 13 Bankruptcy?
• What Debts Does Chapter 13 Bankruptcy Cover In Georgia?
• Georgia Bankruptcy Lawyer Answers: What Debt Do You Still Owe When Filing A Chapter 13?

This content is for general informational purposes only and is not a substitute for professional, tailored advice. Our services are strictly focused on Bankruptcy within the National area. This article is not a guarantee of service representation.