Depending on a debtor's income, the debtor may provide the bankruptcy court with a Chapter 13 Plan to repay his or her creditors within three to five years. The amount the creditor pays under the plan is determined by the debtor's Disposable Monthly Income.

Upon approval by the Bankruptcy Court, the debtor is obligated to repay the creditors pursuant to the Plan. During the repayment period, the trustee is heavily involved with distributing the payment to the creditors.

Chapter 13 Bankruptcy is ideal for individuals that are in arrears on their mortgage and want to prevent their home from being sold at a foreclosure sale.