Chapter 13 is a form of reorganization under the U.S. Bankruptcy Code.  In a Chapter 13 case, a person commits all of his disposable income toward the repayment of his debts.  This may or may not pay the debt back in full.  The Chapter 13 payment plan can run as long as 60 months.  Many case run much less than 60 months and repay much less than 100% of the debt.

One of the greatest uses of Chapter 13 is to save a home which is in foreclosure and subject to a Sheriff’s sale.  Not only will Chapter stop a Sheriff’s sale and foreclosure dead in its tracks, it will also allow a person to repay the mortgage arrears over time.  One can also restructure an auto loan by paying that debt over time.  Depending upon when the auto was purchased, a person may be able to pay the secured portion in full and the unsecured portion less than 100%.  Provided the person makes timely payments while in the Chapter 13, creditors will not be able to pursue the debtor outside the Chapter 13.  A debtor receives a discharge under Chapter 13 once he has completed his payments in accordance with the terms of the plan.

It is possible to pay a particular creditor more than another creditor provided that the debt is joint and the person is willing to protect the co-debtor.