Chapter 13 Bankruptcy is designed for people with regular income who are facing financial difficulty but would like to pay all or part of their debts in installments over a period of time (usually 3 or 5 years), and/or for people who do not pass the means test and, therefore, cannot file a Chapter 7 Bankruptcy.
Under Chapter 13, you must file with the court a Plan to repay your creditors all or part of the money that you owe them, using your future earnings. The period allowed by the court to repay your debts may be three years or five years, depending upon your income and other factors.
The court must approve and confirm your Plan before it can take full effect.
After completing the payments under your Plan, your remaining debts are then discharged except for domestic support obligations; most student loans; certain taxes; most criminal fines and restitution obligations; certain debts which are not properly listed in your bankruptcy papers; certain debts for acts that caused death or personal injury; and certain long term secured obligations, such as mortgages and car loans.