Background Of Chapter 13

A Chapter 13 Bankruptcy is also called a Wage Earner's Plan.  It enables individuals with regular income to develop a Plan to repay all, or part, of their debts.  Under this Chapter, debtors propose a Repayment Plan to make installments to creditors over three (3) to five (5) years.  If the debtor's current monthly income is less than the applicable state median, the Plan will be for three (3) years unless the court approves a longer period "for cause." (1)  If the debtor's current monthly income is greater than the applicable state median, the Plan generally must be for five (5) years.  In no case may a Plan provide for payments over a period longer than five (5) years (11 U.S.C. §1322(d)).  During this time, the law forbids creditors from starting or continuing collection efforts.

This chapter discusses six aspects of a Chapter 13 proceeding: the advantages of choosing Chapter 13, Chapter 13 eligibility requirements, how a Chapter 13 proceeding works, what may be included in the Chapter 13 Repayment Plan (and how it is confirmed), making the Plan work, and the special Chapter 13 Discharge.

** The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.**