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Chapter 13 is often recommended if you are facing foreclosure of your home, have many valuable  assets that you want to protect or your income exceeds certain minimum requirements.
If you have a regular income, Chapter 13 provides a method for repaying your debts over a period of time according to a court approved plan. Chapter 13 allows you to stop foreclosures and wage garnishments, catch up on past due mortgage payments, restructure your car loan and pay off your other debts according to your ability to pay. In most cases, your monthly payments will be dramatically reduced.
 In addition to foreclosures and wage garnishments, Chapter 13 even stops repossession of your car, truck or RV and stops late charges, interest and penalties on credit cards, taxes and other loans. In most cases even NSF checks can be repaid through debt consolidation. Debt consolidation allows you to lump almost every bill you have into one low monthly payment.
 Your bankruptcy attorney will prepare a plan telling your creditors exactly what they're going to receive according to your individual budget. Your budget is calculated by what you can afford to pay based on your income and expenses. In our experience, most of the plans approved by the local Bankruptcy Court will completely eliminate your unsecured debts such as credit cards, medical bills, repossessions and sometimes IRS taxes.
The following chart is meant to provide you with an idea of what your payments would be assuming a 5% Chapter 13 Plan versus paying off your debt making minimum monthly credit card payments. The chart is provided to your for illustration purposes only. Your individual results may vary dramatically from the illustration below. Your actual payments may be much higher or lower than those reflected in the chart.
| Amount Owned |
|
Minimum Credit
Card Payment |
|
Chapter 13
Repayment Plan | |
 |
| $10,000 |
$250/mo. |
$24,615 Total |
$9/mo. |
$24,115 Total |
$22,516 |
| $15,000 |
$375/mo. |
$37,116 Total |
$14/mo. |
$36,366 Total |
$33,958 |
| $20,000 |
$500/mo. |
$39,615 Total |
$18/mo. |
$48,615 Total |
$45,404 | |
