Under this section the person filing bankruptcy repays his/her creditors. The repayment may range from one penny on the dollar (one percent) to full repayment (one hundred percent), depending on the nature of the debts and the ability of the person filing to repay.

A person must have some source of income in order to enter into a Chapter 13 repayment plan, but provided the income is enough, a person can almost always keep his/her home and car.

To begin Chapter 13 protection a person files a petition with he Court which shows all of his/her debts and assets and lists all of his/her income. Along with the petition a "plan" is filed which shows what part of a person’s income will be devoted to paying the debts included in the petition and specifies how the debts will be paid. The plan must include all a person’s disposable income and must last no less than 36 months and no more than 60 months.

Taxes, back child support, and other debts non dischargeable in a Chapter 7 can be included and paid in a Chapter 13.

Do not be confused by what you will hear from friends and family. If your financial situation is serious take the time to come in for a free no pressure consultation in which we will give you the facts you need to make these important decisions for yourself.