You may have heard the term "wage earner plan" used in conjunction with talking about bankruptcy. This term, according to the Eastern District of Virginia, is used in the state as another way to identify Chapter 13 bankruptcy. Because Chapter 13 is a repayment plan, the name is descriptive of the fact that you need to be a wage earner to file under that chapter so you can make the repayments required.
Under this plan, your debts are organized so that you can pay the majority of them off following the court's repayment plan. You can take three to five years to complete the plan.
To file Chapter 13, you need to file a petition and pay a fee. You will provide the court with a list of your creditors and debts. The court will look at your income and debts to formulate a repayment plan that is fair to everyone. Depending on your income, you will probably not repay every debt completely. In fact, you may not even have to repay all debts. You will probably pay a portion of each debt under the plan to satisfy the court.
Creditors have to agree to the repayment. Once they agree, they can no longer try to collect any more money from you. They have to follow the plan as well. Once you complete the plan, your debts are considered satisfied. Creditors cannot try to collect any money they weren't paid. Your debts are officially discharged. This information is for education and is not legal advice.