Chapter 13 is a type of bankruptcy that allows you to pay off debt without sacrificing your property. It is more of a financial reorganization plan when compared to chapter 7, which involves the liquidation of assets. It is important that you understand what the court will expect of you when filing for chapter 13 to achieve the best possible outcome. 

You must attend credit counseling 

You are responsible for developing a reasonable re-payment plan. This is done in conjunction with a credit counselor, who will help you make good decisions when developing your plan. You must attend all credit counseling sessions for your bankruptcy to be upheld. Additionally, you must go to a credit counselor that is approved by the court. 

Some debt must be paid in full 

While it is true the amount of debt you owe may be reduced during chapter 13, there are some debts that require full repayment. These are called priority debt, which includes things like payments for child support, student loans, and taxes. Secured debts are next, which are items that have collateral backing them (such as a car loan). Filers are usually obligated to repay all or most of the secured debts if they wish to keep the property. Unsecured debts, which include things like credit cards, are often forgiven or decreased depending on the circumstances surrounding your bankruptcy. 

Missed payments can be disastrous 

It is crucial that you make all payments associated with your bankruptcy plan for it to remain in effect. Failure to do so can lead to the loss of your home if foreclosure proceedings are in process. While it is true that chapter 13 halts foreclosure, it only remains effective if regular payments are being made.