Chapter 13

Chapter 13 Bankruptcy

In some ways, a Chapter 13 Bankruptcy is similar to a debt repayment program, with a few important differences. In Chapter 13 Bankruptcy, the debtor files a “Chapter 13 Plan” with the Bankruptcy Court. This plan has the debtor agree to make the best effort to pay off as much debt as possible over a five-year period of time. Generally, in Chapter 13, all secured debts must be paid in full, as well as most back taxes and child support. Any funds left over after payment of these debts are split equally among the unsecured creditors. Each unsecured creditor receives a percentage of what is owed, depending on the ability to pay. Most unsecured debts remaining at the end of the case are discharged.