Chapter 13 Bankruptcy allows an individual or business to keep their property, and they pay most or all of your debts back over a three to five-year period. However, Chapter 13 Bankruptcy isn't for everyone. Because Chapter 13 requires that you repay your debts, you must prove to the Court that you can meet these payment obligations.
How does Chapter 13 Bankruptcy work?
Chapter 13 Bankruptcy requires you to fully repay certain debts. These are called "priority debts." Priority debts include things like child support, alimony, wages you owe to employees, and certain tax obligations.
Your repayment plan must also include monthly payments for secured debts, such as your automobile loans and your mortgage. At the end of the month, any disposable income you have left will go towards repaying unsecured loans. Unsecured loans are things such as credit cards and medical bills.