Pros:
- Can protect your house and car if you are behind on the payments. It gives you up to 5 years to pay the arrearage while maintaining current payments
- Can address some divorce obligations such as payment of a property settlement.
- Can pay priority obligations like tax debt over time.
- Can toll the payment of student loans or make them during the Plan payment period and maintain participation in certain Department of Education programs.
Cons:
- Can last up to 5 years
- Can fail in the Plan payments and end up behind again.
- Can be difficult to make the Plan payment obligation – can be high depending on your income and arrearages.
- Tax refunds can be confiscated by the Chapter 13 Trustee and used to pay your creditors.
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