Chapter 13 Bankruptcy
A Chapter 13 bankruptcy is a personal reorganization. It is a "paying kind" of bankruptcy. When someone does a Chapter 13 bankruptcy they make payments each month to a Chapter 13 Trustee to pay back something of what they owe. While there are many reasons why we would file either a Chapter 7 bankruptcy or a Chapter 13 bankruptcy generally, we file a Chapter 13 bankruptcy if someone is behind on something that they want to keep. For example, they are behind with car payments and they want to keep their car, they are behind with mortgage payments and they want to keep their house, they are behind with their rent payments and want to keep their lease.
When we do a Chapter 13 bankruptcy and you are behind on payments for something that you want to keep, you would resume making your normal monthly payment with the next payment that is due after the bankruptcy is filed. Plus the month after the bankruptcy is filed, you start paying the Chapter 13 Trustee to take care of the arrears that existed on whatever you wanted to keep. In a Chapter 13 bankruptcy, you do not necessarily have to pay anything back to unsecured creditors; it depends on your income and other factors. If you make a great deal of money, or if you have more property than the bankruptcy laws would allow you to have, you would have to pay something back to your unsecured creditors through the Chapter 13 Trustee.
In a Chapter 13 bankruptcy, if you do have more property than that which you are allowed to have you do not lose that property, it is just a function of how much you have to pay back to your unsecured creditors.
