Chapter 13 bankruptcy allows a person to consolidate their debt while making monthly payments to a trustee. A payment plan is proposed which repays all or a portion of the debt over a three to five year period. The amount of the monthly payment and the length of the repayment plan is based on:

• Monthly income of the person
• Monthly expenses of the person
• Amount and nature of the debt

The most common uses of Chapter 13 involve:

• Repayment of home mortgage arrears
• Restructuring of auto loans to save a vehicle

Secured debts are paid 100% on the dollar, while unsecured debts may be paid less than 100% on the dollar. A person receives a discharge under Chapter 13 once the payment plan is completed.