The Payment Plan

• When you file Chapter 13, you'll have to draw up a payment plan based on your disposable income. This is the money you have left after paying living expenses, charitable donations and debts that Chapter 13 can't discharge --- wipe out --- such as mortgages and child support payments. Each month, the money goes toward your dischargeable debts, with each creditor receiving an equal share of the payments. You'll keep paying for three years if your income is under the state median, five years if it's not.
  
  

Modification

• You're free to revise your plan until the court confirms it. After the plan is confirmed, you have to submit a legal motion to modify it, and your creditors have 21 days to make objections. One of your creditors can also request a modification if he decides you're not paying enough. While you can reduce payments to many of your creditors, you may not be able to cut your payments on debts that can't be discharged.
  
  

Conversion

• Instead of modifying the plan, you can ask the court to convert the bankruptcy to Chapter 7. In Chapter 7, the court takes your assets and cash --- bankruptcy law may protect some of your property --- and use them to pay off your debts before discharging the rest. To qualify for Chapter 7, your average income has to be below your state's median, or you pass a means test that adjusts your income for your expenses. Even if you didn't qualify when you filed for Chapter 13, check again if your finances have changed.
  
  

Hardship Discharge

• If you can't handle even a modified plan --- you've caught a crippling long-term illness, for example --- you can ask the court for a hardship discharge. If the court agrees, it will end the plan and grant the discharge at once. The court may agree if there's no way you can modify the plan; the circumstances are outside your control and you've paid your creditors at least as much as they would receive if you'd filed Chapter 7.