Chapter 13 bankruptcy is the procedure to be forgiven of some of your debts by entering into a repayment plan that repays the debts you must pay, over a period of 5 years. You must repay secured debts for assets you keep and a percentage of the unsecured debts. If you have significant assets, you may be required to pay 100% of unsecured debts.
The most important use of this procedure is to save your house from foreclosure. If you are behind on payments and are in or likely to go into foreclosure, a Chapter 13 filing is an effective tool to keep the house.
In order to make it effective, you must have sufficient income to make the current payments and 1/60 of the past due amounts.
You will have the right to retain your assets. The amount of assets determines the percentage of unsecured debts you must pay.
Your attorney will work out a plan of repayment over 60 months and present it to the Chapter 13 administrator, John Hardeman, whose recommendation to the Chapter 13 Court will generally be accepted. If the Chapter 13 plan is approved, then you will have the right to make the monthly payments and have all debts taken care of under the Plan over the 5 year time of the Plan.
When the plan is fully paid you will be discharge and, any required ongoing payments you had befor filing will continue as they were before you filed, such as your house.