Chapter 13 Chapter 13 Bankruptcy Chapter 13 Bankruptcy is significantly different from a Chapter 7 Bankruptcy. A Chapter 13 is a reorganization of debt, allowing Debtors to repay all or a portion of their debts through a Chapter 13 plan while protecting property and personal assets. The concept is similar to debt consolidation, but unlike most debt consolidation programs, it permits Debtors to pay unsecured debt (i.e. a debt that is not secured by property) pennies on the dollar without accruing interest (student loans are an exception) and without having to deal with those annoying calls from debt collectors. Typical Bankruptcy Plans Under a typical plan, you make monthly payments to a court appointed bankruptcy trustee for generally three to five years. The amount of your monthly payment is determined by several factors such as the amount of debt you have, your ability to repay and the extent that you have assets. The bankruptcy trustee distributes the money to your creditors.Under Florida bankruptcy law, the second mortgage can be stripped away if it is not secured by the value of the house. For example, if you have a first mortgage of $200k and a second mortgage for $100k and your house is only worth $200k, the second mortgage can be stripped away as a lien against your house.