A Bankruptcy Chapter 13 is a personal reorganization. It is a "paying kind" of bankruptcy. When a person files a Chapter 13 bankruptcy, a monthly payment schedule is setup with a Chapter 13 Trustee to pay back a percentage of what they owe. A person would file a Chapter 13 bankruptcy if they are 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 do not want to give up, you would begin to make 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 making the monthly payments based on what the Chapter 13 Trustee has determined to take care of the back payments on the items you wanted to keep. In a Chapter 13 bankruptcy, you may not have to pay back the 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.