What is Chapter 13 Bankruptcy?
Chapter 13 is a type of consumer bankruptcy.  People who file for Chapter 13 are not looking to have their debts eliminated.  Instead, they are looking to repay the debts they owe to creditors, but over a time span of 3 to 5 years.  Often times, people choose to file for Chapter 13 Bankruptcy when they are not eligible for Chapter 7.  People also choose to file for Chapter 13 when they are behind on major bills like mortgage or car payments.

Chapter 13:  Making Monthly Payments
After people successfully file for Chapter 13, they will have to make one payment a month.  This payment will be applied to the debt that they owe to their creditors.  When filing for Chapter 13, people have to submit a plan that details the amount of money they plan to pay each month.  This amount must be approved of by their creditors and by the bankruptcy trustee that is appointed to their cases.  Approximately 2 months after people file for Chapter 13, they will have to make their first monthly payment and will continue to do so until their debts are paid in full.  People will have 3 to 5 years to repay their debts.  However, many people are able to finish repaying their debts in less time if they make large monthly payments.

Chapter 13 Pre-requisites
Not all people are eligible for Chapter 13.  In order to move forward with filing for Chapter 13, people must meet residency requirements.  The must not have filed for bankruptcy in the last 8 years or have a bankruptcy dismissed in the past 6 months.  Also, people must complete credit counseling 180 days before they submit their bankruptcy petitions and take the state’s means test.  People who file for Chapter 13 can have no more than $250,000 in unsecured debt or more than $750,000 in secured debt.