Unlike a Chapter 7, which discharges debt in 4-6 months, Chapter 13 restructures debt into a payment plan that takes 3-5 years to complete. The size of your monthly plan depends on your disposable income (i.e. the money left over after paying your expenses). After completing this payment plan, the court can discharge any remaining unsecured debt (like credit card debt, payday loans, medical bills, utility bills, etc).
While Chapter 13 will not discharge secured debt such as a mortgage or vehicle loan, it does give you the time you need to catch up on your debts without being sued or garnished. Because of the automatic stay, your creditors cannot try to collect your debt during your bankruptcy case0 this means you are protected from creditor calling you, suing you, sending you letters, or foreclosing on your house. If you complete your Chapter 13 successfully, then you will retain ownership of your assets.
It is important to note that any decisions made in regards to keeping or surrendering a home or car are only done after careful contemplation. Sometimes our clients want to keep their homes and a Chapter 13 is a perfect tool to use to get caught up with missed mortgage payments. There are also times where our clients start in a Chapter 13 but then decide that the burden of the home is too much for them to financially shoulder, and in those cases we explore other alternatives.
Some debtors try and navigate the rough waters of a bankruptcy on their own. This is a very risky choice. You will be held to the same standard as an attorney, and as such will be required to understand the United State Bankruptcy Code and abide by its very specific rules. So don’t do it!