For people who exceed the income or asset limits provided for under chapter 7 bankruptcy, a chapter 13 bankruptcy may be necessary.
Chapter 13 allows people who are delinquent on their mortgages or car payments to catch up over a period of time. You may be required to pay back all or a portion of your other debt in addition to catching up on your mortgages and vehicles. At a minimum you will be required to pay arrears on mortgages and vehicles through a plan that will require you to make all of your regular monthly payments on your mortgage and cars in addition to monthly payments to the trustee appointed in your case to catch up on the arrears.
There are many features of chapter 13 bankruptcy that may provide significant relief and provide for a reduction of your debt load. In many cases interest will stop accruing on debt providing a significant benefit.
