Chapter 13 is a type of “reorganization” used by individuals to pay all or a portion of their debts over a period of 3 to 5 years using their current income. A “plan” is filed with the court, which shows how you will pay off some of your past-due and current debts. A chapter 13 case allows you to keep valuable property – especially your home and car – which might otherwise be lost, if you can make the payments which the bankruptcy law requires to be made to your creditors. In most cases, these payments will be at least as much as your regular monthly payments on your mortgage or car loan, with some extra payment to get caught up on the amount you have fallen behind.
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