Chapter 13

Chapter 13 bankruptcy is primarily used to stop a foreclosure or other collection action. Chapter 13 allows you to set up a repayment plan with the Trustee to get on the debts you want to pay (like house and car loans), debts you have to pay (like tax and child support) while still allowing you to discharge other debts (like credit cards and medical bills).

Most people do not have to pay 100% of all debts in a Chapter 13 bankruptcy.

The payment plan must show a good faith effort to repay your creditors. At a minimum, it must pay any arrearages on secured property and domestic support orders as well as paying off all outstanding tax debts. If you can afford to pay more than that minimum amount, then your unsecured creditors share the rest.

A Chapter 13 payment plan can run between 3 and 5 years. At the end of that period, any debts that have not been paid are discharged.