Investopedia explains 'Wage Earner Plan (Chapter 13 Bankruptcy)'
A Chapter 13 bankruptcy offers individuals a number of advantages over Chapter 7, the most important being that it offers them an opportunity to save their homes from foreclosure. Chapter 13 also allows individuals to reschedule secured debts - except for a mortgage on their primary residence - and extend them over the life of the plan, which may lower their payments. In addition, Chapter 13 has a special provision that may protect co-signers, and also acts like a consolidation plan under which plan payments are made to a trustee who distributes them to creditors.
Any individual is eligible for Chapter 13 relief as long as his or her unsecured debts are less than $360,475, and secured debts are less than $1,081,400 (as of 2010), and he or she has received credit counseling within 180 days before filing. A corporation or partnership is not eligible for Chapter 13 bankruptcy.
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