If you file for Chapter 13 bankruptcy, your debt is consolidated into a repayment plan. This is different from Chapter 7, where you have to liquidate non-exempt assets. With Chapter 13, the goal is to pay off the debt over time, making it affordable based on your income level and available assets.
Typically, this means that you have to make Chapter 13 payments to the bankruptcy trustee every month. They then take the money that has been provided and distribute it to the creditors, paying down what you owe. You must stay current on those monthly payments to complete the plan.
Secured versus unsecured debts
There can be some differences in how debt is addressed, often revolving around whether it is an unsecured or secured debt. Many types of debts have to be paid in full through the repayment plan, such as taxes, alimony or child support. You may also be seeking to keep certain property, so you have to pay off the secured debts in order to do that.
A portion of unsecured debts may also be paid back, but you may not be required to make complete repayment of everything that is owed. Often, creditors get roughly the same amount they would see under a Chapter 7 bankruptcy, but some unsecured debts may be eligible for discharge at the completion of the repayment plan.
As such, it is very important to understand how your unique repayment plan has been structured and when these payments are necessary. Be sure you understand what options you have when going through the bankruptcy process. Getting experienced legal guidance is a good start.