Requirements

• To qualify for a Chapter 13 bankruptcy, you must have reliable income that is enough to pay for your living expenses, including your mortgage, utilities, car payments and insurance and food; and you must have enough to make your Chapter 13 installment payments comfortably. According to the American Bar Association, as of 2011, your total debt can be no more than $922,975 in secured debts -- debts that are guaranteed by collateral such as your car or house -- and no more than $307,675 in unsecured debts -- credit cards, store cards, gas cards and medical bills.
  
  

Application

• Before filing the bankruptcy petition, you are required to take an educational course through an approved counseling agency and get a certificate saying that you finished the course. The next step is to file the bankruptcy petition with the bankruptcy court clerk and pay the filing fee. After you file the petition, the court will send notice to the creditors listed in your petition and appoint a bankruptcy trustee to your case. Your appointed trustee will schedule a meeting with your creditors within 30 days. You are required to attend this meeting before your petition can be approved.
  
  

Payments

• After you are notified that your petition has been approved, a beginning date for your installment agreement will be determined and written in your case paperwork. You will then begin making payments according to your installment agreement. Because of the new laws affecting bankruptcy that were passed in 2005, in addition to the prefiling educational course that you are required to take, you must take another educational course within 45 days after the meeting of creditors. This is a financial management course, and you are required to get another certificate indicating that you completed this course as well.
  
  

Warnings

• You must begin your payments within 30 days from the date of the proposal, else the Trustee can release an order to dissolve your case without giving any warning. Furthermore, it is extremely important that you commit to your monthly payment, making every single payment without without fail, because missing one payment can endanger the condition of your bankruptcy agreement. If you do not complete your payments, according to the U.S. Courts website, "the court may dismiss the case or convert it to a liquidation case under chapter 7 of the Bankruptcy Code."