Chapter 13
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
- Amount and nature of the debt
The most common uses of Chapter 13 involve:
- Repayment of mortgage arrears (back amounts owed) home
- Restructuring of auto loans to save a vehicle
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.
