Debt Collectors

• Most creditors are required to stop their collection efforts during the time the bankruptcy is going on, including the time of the payment plan. Exceptions include child support and tax debts.
  
  

Foreclosure

• Debtors may stop foreclosure on their homes by catching up missed payments during the Chapter 13 payment plan. Debtors must make the required regular payments during the plan.
  
  

Consolidation of Debts

• In a Chapter 13 bankruptcy, debts are paid through the trustee with money from the debtors. The payment plans are for a set period of time, usually three to five years, with payments based on the debtors' incomes.
  
  

Strict Budget

• The debtor is not allowed to keep or spend any of his disposable income. It all goes to paying the creditors.
  
  

Discharge

• The sum of the payments of the Chapter 13 plan may not be equal to the amount owed the creditor. Yet, the bankruptcy will still be discharged if the debtors are careful to follow the plan.
  
  

Future Credit

• Chapter 13 bankruptcy stays on a credit score for the next seven years following the bankruptcy. It can take at least three to four years to begin to recover a moderate credit score again, if you make the best choices.