Chapter 13 bankruptcy can relieve stress that comes with financial burdens. However, this option is not for everyone. For example, those who have had their debt discharged in the past four years are ineligible. Chapter 13 bankruptcy is also only available to those who have less than $336,900 in unsecured debts and less than $1,010,650 in secured debts.
Chapter 13 bankruptcy consolidates your debts with a payment based on what you can afford in the next three to five years. Often, the amount you pay back is less than the full amount owed, and your interest rates can be reduced substantially.
Under Chapter 13, some debts must be paid in full. Child support, alimony, and non-dischargeable taxes must be paid off, even though these are unsecured debts. In addition, secured debts such as a mortgage, vehicle loans, and tax liens must be paid in full during the repayment time. Other debts are then reduced.