Chapter 13 bankruptcy is a reorganization of your debt. That is the bankruptcy where you pay back your bills, so sometimes people fall behind on their mortgage payments or they fall behind on their car payments and they are faced with the mortgage foreclosure or car repossession. Chapter 13 bankruptcy will stop any type of mortgage foreclosure, it will stop any type of lawsuit activity against you and will give you a safe haven and will give you enough time to restructure yourself, so you can get into a payment plan with your creditors and start making payments to them.
One of the benefits you get out of filing for Chapter 13 bankruptcy, if you have a large amount of unsecured debt, is you get to eliminate any type of interest or any type of penalty when you are making the payments. So every single time you make a payment, you are paying off a hundred percent principle owed to that debtor. That is the upper hand, generally speaking, that people are looking for because if you are not in a Chapter 13 bankruptcy and you're making your payments on your own, generally speaking, when you are making your payments, you are only paying off the interests and you are never getting into the principal amount.