If you desire to repay all or part of your debts, but have fallen behind on your payments and simply need relief and protection from your creditors until you can regain your financial footing, a Chapter 13 bankruptcy, commonly referred to as a wage earner repayment plan, can help you meet those needs. Under a wage earner plan, you propose a financial plan based on your monthly disposable income that will allow you to repay a portion or all of your debts over a period of three to five years without interference from your creditors and without giving up your assets. If the bankruptcy court and your creditors approve your repayment plan, you’ll be required to make your monthly payments under the plan to the trustee overseeing your case. The trustee will be responsible for dispersing your payments to the appropriate creditors. Once you complete all payments under your repayment plan, your debts are discharged and you’ll be left with the satisfaction of paying your creditors and keeping your assets. To be eligible to file a Chapter 13 wage earner plan, you must be an individual or small business owner with a regular income greater than your reasonable living expenses. The total amount of your debts must also not exceed the limit imposed by Chapter 13 regulations. All debts discharged through a Chapter 13 bankruptcy will remain on your credit report for seven years.
