Chapter 13 bankruptcy reorganizes your debt rather than having it forgiven as it often does in a Chapter 7.
For those who do not qualify for a Chapter 7, or who would rather the other benefits: stopping a foreclosure by allowing you the time to bring your mortgage current; by allowing the debtor to keep their assets and catch up on any debt that is not bankrupt-able.
The Chapter 13 process requires the court to approve a monthly payment plan for you, so as the debtor you pay back a portion of your unsecured debt and your secured debt over in three to five years.
The determined monthly payment amount depends on your income and your amount of debt, and the court puts you on a strict budget to check on your spending and the fulfillment of the debt being paid back.
You are required to be current on your taxes, and the Chapter 13 Bankruptcy will remain on your credit report for seven years, though you can file for another after two years time.
