Chapter 13 bankruptcy is an important feature applicable to all types of bankruptcy filings is the automatic stay. Under Chapter 13, the debtor proposes a plan to pay his creditors over a 3- to 5-year period. Secured creditors may be entitled to greater payment than unsecured creditors.
Relief under Chapter 13 is available only to individuals with regular income whose debts do not exceed prescribed limits. If your monthly income is greater than your state's median income, the plan must generally be for five years. A Bankruptcy Exemption defines the property a debtor may retain and preserve through bankruptcy. Certain real and personal property can be exempted on "Schedule C" of a debtors bankruptcy forms, and effectively be taken outside the debtor's bankruptcy estate. Bankruptcy Exemptions are available only to individuals filing bankruptcy.
The advantages of Chapter 13 over Chapter 7 is stopping of all foreclosures and having an 'accelerated' mortgage being reinstated when the bankruptcy plan is fulfilled. Certain debts that are not dischargeable under Chapter 7 can be discharged under Chapter 13.
