Who Can File Chapter 13

• Any person is eligible to file Chapter 13 if his or her secured debt is less than $1,010,650 and unsecured debt is less than $336,900, although these figures change according to the consumer price index.
  
  You are not eligible to file Chapter 13 relief if you have filed for any bankruptcy chapter in the last 180 days, and your case was dismissed because you purposely didn't appear in court or purposely did not comply with the orders of the court.
  
  

The Process

• To begin the process, a debtor files a Chapter 13 petition with the court and provides a list of assets and liabilities, current income, current contracts and leases he or she is under, and a statement of financial affairs.
  
  The debtor must also provide a certificate of credit counseling and a copy of the financial plan developed in the credit counseling session. The debtor must also submit other forms of income and debt verification, as well as a $235 filing fee and $39 miscellaneous administration fee.
  
  

Following Through

• Once the plan for repayment is set and agreed to by the creditors and the debtor, the debtor is obligated to adhere to the terms of the agreement and continuously make the set payments. This will mean living on a set budget for the duration of the agreement, between three and five years.
  
  The debtor has the option of having the agreed payments automatically deducted from his or her payroll, which ensures the payments will be made. The debtor is not allowed to incure any new debt, as this would make it difficult to pay off old debt.
  
  

Discharge

• The debtor is discharged from debts acquired before the repayment plan was confirmed. This means the debtor is not obligated to pay any previous debts prior to petitioning for Chapter 13. There are several exceptions to what is discharged, such as alimony and child support payments, mortgage loans, federal student loans and debts that come from the debtor committing a crime.
  
  

Hardship Discharge

• A hardship discharge occurs when the repayment plan can't be completed by the debtor because of some unforseen reason that the debtor could not control. For example, if the debtor becomes injured or ill and is no longer able to work, he or she may ask the court to grant a hardship discharge.
  
  Usually, a hardship discharge may only be granted if the debtor's inability to complete the repayment plan is due to no fault of their own, the creditor has collected as much as would be possible under Chapter 7 bankruptcy and modifying the plan is not an option.