Chapter 13 allows debtors to impose a repayment plan on creditors that can last up to five years.
Chapter 13 is most often used to save a house from foreclosure because it allows a debtor to cure a mortgage default by making payments in installments. The debtor can repay his arrears in monthly installments over a five year period while at the same time making current monthly payments. Unfortunately, Chapter 13 can be very difficult for many debtors to afford because it does require the debtor to pay their mortgage at the same time as they make plan payment on the arrears. It is probably more desirable, if possible, to obtain a mortgage modification instead of filing a Chapter 13 bankruptcy.
Chapter 13 can also be used to repay a car loan that is in default to prevent the car from being repossessed or even get back a car that was recently repossessed.
In many instance, depending on the debtor's income and assets, unsecured debts can be discharged without having to repay them.
