Chapter 13 is for individuals with a standard income, keeping in mind their intention to pay their debts but are unable to do so in a timely manner. The rationale of Chapter 13 is to facilitate financially distressed individual debtors to propose and carry out a settlement plan under which creditors are paid over an extended period of time.

According to this chapter, debtors are permitted to pay off creditors, in full or in part, over a three-to five-year period, during which time creditors are prohibited from starting or continuing collection efforts. A plan providing for payments over more than three years must be for a reason and must be approved by the court. Under no condition may a plan provide for payments over a period that is longer than five years.

Any person, even if self-employed or operating an unincorporated business is qualified for Chapter 13 aid. Eligibility is dependent the person's unsecured and secured debts adjusted annually by statute. A company or partnership is not generally permitted to be a Chapter 13 debtor.

This chapter considers six aspects of a Chapter 13 proceeding. It deals with the advantages of choosing chapter 13, the Chapter 13 eligibility requirements and how a Chapter 13 proceeding works. It also takes into account factors that may be included in a Chapter 13 repayment plan, its confirmation, making the plan work, and the particular Chapter 13 discharge.

Chapter 13 bankruptcy, unlike Chapter 7, does not completely discharge a person's debt. Instead, under a Chapter 13 plan, people use their income to pay back some or all of what they owe to their creditors, generally in a three-year time period. To file for Chapter 13 Bankruptcy, you must have a stable income, secured debts less than $870,000 and unsecured debts of less than $290,000.

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