Procedure

• To enter Chapter 13, you have to file a bankruptcy petition, including detailed information on your income and debts, with the federal bankruptcy court serving your district, according to the U.S. Courts website. Forms and instructions for filing are available on the website. Once the you file a petition, the court will impose an automatic stay, preventing your lender from foreclosing until the court works out a plan for you to repay your debts or rejects your petition.
  
  

Time Frame

• The payment plan will run for either three or five years, the Nolo legal website states. During this time, you'll spend all your discretionary income paying down as much of your debts as you can; when the plan is over, any remaining debt will be discharged, with exceptions such as tax debts, alimony and your mortgage.
  
  

Benefits

• If you've fallen behind in your mortgage payments, Chapter 13 will allow you to pay the back debt off over the three or five years of the plan, Nolo states. You'll also have to keep up with your current payments, but Chapter 13 will enable you to cut how much you pay other creditors, such as credit-card companies, which will give you more money for your mortgage lender.
  
  

Considerations

• If your home's value has declined until it's less than your mortgage, you may be able to avoid payments on any home equity loans--otherwise known as second mortgages--that you've taken out, according to Nolo. Chapter 13 won't erase debt that's secured by a claim on your house, but if your house isn't worth enough to pay anything on your second mortgage, the judge may decide that it's "unsecured," putting it at the same level as credit-card bills.
  
  

Warning

• There are limits to how much debt you can have and still file for Chapter 13, according to the U.S. Courts. You may also be barred from filing if you've filed for bankruptcy in the previous six months and the courts rejected it. Once the payment plan is in place, you must maintain the payments or the court can reject your petition.