The purpose of a Chapter 13 Bankruptcy is to put a hold on the creditors so that the debtor can "catch his or her breath". The Chapter 13 gives the debtor protection so that they can develop with their attorney a plan to resolve all of the debt issues. Different creditors will receive different treatment based upon the type of debt that they have with the debtor.

The key to Chapter 13 is that not all debts have to be paid in full. It is possible, under the right circumstances, to pay some of the debt at as little as 1% per year with out interest . The Chapter 13 Plan must be designed to meet all the tests required by the court and the Chapter 13 Trustee. Further, the Chapter 13 discharges debts that cannot be discharged in Chapter 7 such as older taxes and recent credit card purchases or cash withdraws. The Bankruptcy Code does require that priority claims be paid in full. Priority claims are things such as recent tax arrears and Child Support.

In a Chapter 13, payments are made on a weekly, bi-weekly, or monthly basis to a Chapter 13 Trustee who disperses the monies pursuant to the confirmation order of the court. Plans can range from 36 to 60 months. When the plan is completed, the remaining debts, with the exception of mortgages most and student loans are then discharge.

Chapter 13 Bankruptcy originated during the 1930's and the Great Depression. It was developed by Congress to provide relief to those people who could not pay their debts and who wanted to save their houses.

Chapter 13 Bankruptcy is a repayment plan that protects the debtor for collection actions during the period of the Bankruptcy. Further, the discharge in a Chapter 13 is more general then that of a Chapter 7. (The discharge in Chapter 13 is sometimes called a, "super discharge".) It is very powerful tool designed for debtors to save their assets, take control and receive a meaningful fresh financial start.