Chapter 13 in the Bankruptcy Code treats a broader range of debts than Chapter 7, but payments must be made to a Trustee for a period of time. The Trustee passes some payments to creditors. There are certain benefits available. Chapter 13 is sometimes referred to as a "Wage Earner's Plan."
Chapter 13 allows individuals to temporarily halt foreclosures and collection actions while they draft and execute a plan to repay some or all of the debts over a three- to five-year period. The repayment plan needs to be approved by the bankruptcy court. Sometimes, if you are behind on your mortgage or your car loan, and you don't think you can catch up easily, you file a Chapter 13 bankruptcy. Your debts may be restructured, and some interest rates may be changed on your loans.
Ted Machi is Board Certified* in Consumer Bankruptcy law by the Texas Board of Legal Specialization. For over thirty years, he has helped the little guy in the DFW metroplex through effective, determined, professional representation.