The term “chapter 13” refers to the chapter of the bankruptcy code which allows individuals with regular income to pay off all or a portion of their debts through a court ordered plan. A chapter 13 bankruptcy is sometimes called a repayment plan, reorganization or wage earner’s plan. It allows individuals with steady income to create a plan to repay all or part of their debts over a 36 to 60 months time period. The repayment plan is developed by you and I, and is based on your monthly budget and certain Bankruptcy Code guidelines. If your current monthly income is less than the applicable state median, your plan will usually be for three years unless the court approves a longer period. If your current monthly income is greater than the applicable state median, your plan will be for five years. While the plan is in effect, your creditors cannot initiate or continue collection efforts. There a many reasons why an individual may end up filing a chapter 13 rather than a chapter 7. I will discuss those situations in detail in subsequent posts. For now, I will just say that most people who file under chapter 13 either 1)make too much money to file a chapter 7; 2)are behind on mortgage payments and trying to save their house; 3)have filed a previous chapter 7 within the past 8 years; or 4)have certain non-exempt assets which they seek to protect through the chapter 13.