• A Chapter 13 bankruptcy, also known as a wage-earner plan, helps you pay off debts that you can no longer afford to pay. One of the main requirements of Chapter 13 is that you must earn a regular income that can be documented through tax returns and pay stubs. In a Chapter 13 bankruptcy, the court requires you to make monthly payments on your debt for a specific time period, usually three or five years. You will also be required to obtain credit counseling, something that can be done at various online sites.
  
  

Financial Eligibility

• In order to file a Chapter 13 bankruptcy, your unsecured debts, such as credit cards, medical bills and personal loans, should be less than $360,475. In addition, your secured debt, such as your house or car, must be less than $1,081,400. If you have filed a bankruptcy case in the last six months, you cannot file for Chapter 13.
  
  

Automatic Stay

• One of the immediate benefits of a Chapter 13 bankruptcy is that upon the filing, the court lowers an "automatic stay" on your creditors. Because of the stay, the law requires any of your creditors or collectors for creditors to stop contacting you. You can simply refer them to your attorney or just let them know that you have filed a bankruptcy case. If your home is nearing foreclosure, the automatic stay stops that proceeding, as well.
  
  

Bankruptcy Petition

• The court-required documents for a Chapter 13 are known collectively as the petition, which is filed by you or your attorney. The petition lists all of your creditors as well as the amounts of money you owe. In addition, the petition documents list your income and your assets, such as your house or car, as well as a detailed list of how much money you spend each month on essentials such as food, clothing, utilities and gas. Finally, the petition includes a proposed monthly payment plan for your bankruptcy.
  
  

Creditor Meeting

• After you file your petition, the bankruptcy court will order a meeting of your creditors. This meeting usually occurs within two months of the filing and provides a forum for any of your creditors to question you regarding your finances and the proposed monthly payments.
  
  

Confirmation

• Around a month and a half after the meeting of creditors, you will be summoned to a hearing in which the bankruptcy judge or a trustee appointed by the court will accept or deny the payment plan. Creditors have the right to come to the hearing if they have any issues with the payment plan. If the judge or trustee denies your payment plan, you or your attorney will have to change it based on the court's suggestions.
  
  

Making Payments

• Within the first 30 days after the initial Chapter 13 filing, you will begin making payments to the court. After the plan is approved, you will make payment every month to the bankruptcy court or to a trustee appointed to accept your payments, who will distribute the money to your creditors. If you miss payments, the court can dismiss your case, which means that you would still be responsible for all of your debts. If your financial circumstances change, you can apply to have your payment plan amended.
  
  

Discharge

• At the end of the designated repayment period, the court will discharge your case provided that you have made all of the payments. A discharge means that you are free from the debts and have caught up any payments on items that you intended to keep, such as your house or your car.