Chapter 13 bankruptcy allows a person to consolidate the debt while making convenient monthly payments to a trustee. A payment plan is proposed which repays the debt over a three to five year period. The amount of the monthly payment and the length of the repayment plan is based upon the following factors:
• Monthly income of the person
• Monthly expenses of the person
The most common uses of Chapter 13 involve:
• Repayment of mortgage arrears (back amounts owed) home
• Restructuring of auto loans to save a vehicle
• Removing a 2nd mortgage
• Payment of past due taxes
• Payment of Arrears on your home and automobile
Secured debts are paid 100% on the dollar, while unsecured debts may be paid less than 100% on the dollar. A person receives a discharge under Chapter 13 once the payment plan is completed.