Chapter 13 is a reorganization proceeding available only to individuals who owe $922,975 or less in secured debt and $307,675 or less in unsecured debt. (These dollar amounts are adjusted every three years, based on changes in the Consumer Price Index.) In chapter 13, the debtor’s assets are not liquidated. Instead, the debtor pays his debts, in whole or in part, through a plan that must be confirmed by the court in accordance with specific statutory criteria.
A debtor in chapter 13 remains in control of his assets. A trustee, however, is appointed. The debtor pays the trustee, who makes payments to creditors pursuant to the confirmed plan. Debtors may obtain a discharge of personal liability from a few more types of debts in chapter 13 than in chapter 7, 11 or 12. The chapter 13 discharge, however, is available only after the debtor has made all of the payments specified in the plan. In unusual “hardship” cases, a chapter 13 debtor may obtain a more limited discharge-equivalent to a chapter 7 discharge-without making all of these payments.