A Chapter 13 bankruptcy allows a debtor to cure mortgage arrears in a three-five year repayment plan. It is a structured and organized plan in which the debtor typically makes monthly payments to the bankruptcy trustee to pay back a portion of their unsecured debt, and the amount that is not paid off at the end of the plan is simply wiped out, tax free. If a debtor pays mortgage arrears in their Chapter 13 repayment plan, the debtor may also benefit from working with their mortgage company to modify their mortgage.

    There are various reasons a Chapter 13 bankruptcy could be dismissed or converted to a Chapter 7 bankruptcy. A Chapter 13 bankruptcy may be voluntarily converted to a Chapter 7 bankruptcy at any time. A Chapter 13 bankruptcy may be voluntarily converted to a Chapter 7 for a number of reasons, including a change in your financial circumstances that may allow a Chapter 7 bankruptcy to be more suitable.