The Chapter 13 bankruptcy, often called the Wage Earner bankruptcy, is a way to reorganize your debt so that you are able to partially or fully repay your debt. The Chapter 13 bankruptcy is not for you if your income is too low or irregular, or if your debts are too high.

Approximately one month after filing you must attend a Meeting of Creditors. You will be assigned a court appointed trustee. You will make payments through a payroll deduction, or at times direct pay, to this trustee who in turn will pay your creditors according to your plan. The secured creditors get paid first, and then the unsecured creditors will get paid a percentage that is determined by the trustee. The Chapter 13 bankruptcy usually takes approximately five years to complete.

A Chapter 13 bankruptcy can be filed to pay off back taxes and stop additional interest on the debt.

The Chapter 13 bankruptcy will stop the foreclosure of a house or the repossession of a car by placing an "automatic stay" on the creditor. The creditor will be unable to garnish your wages, empty your bank account, or cut off your utilities.  Please remember that the bankruptcy law has changed.  If you have filed one prior Chapter 13 Bankruptcy in the last 12 months the automatic stay provides protection only for 30 days unless extended by the court.  There is no automatic stay for 2 or more Chapter 13 Bankruptcies filed in a 12 month period until the court grants one by emergency request.

If you have been evicted or a landlord has received a judgment against you prior to filing the Chapter 13 bankruptcy, the bankruptcy will not stop the eviction.

The Chapter 13 bankruptcy will not get rid of back taxes less than three years old, fraud, DUI, alimony and child support. Student Loans are non-dischargeable. These must all be paid in full in a Chapter 13 bankruptcy.
The Chapter 13 bankruptcy requires discipline because you will be living under a strict budget during the course of the plan. Your trustee must approve any major purchase, such as a house or car.

The Chapter 13 bankruptcy will be on your credit report for ten years from the date of filing.