A chapter 13 bankruptcy is also called a wage earner's plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years.

If the debtor's current monthly income is less than the applicable state median, the plan will be for three years unless the court approves a longer period "for cause." If the debtor's current monthly income is greater than the applicable state median, the plan generally must be for five years. In no case may a plan provide for payments over a period longer than five years. During this time the law forbids creditors from starting or continuing collection efforts.

In Virginia, Chapter 13 bankruptcy, often referred to as a wage earner's plan, allows individuals with a steady income to create a repayment strategy for all or part of their debts. Debtors with a monthly income lower than Virginia's median income can propose a repayment plan lasting three years, although the court can extend this period if there is a justifiable reason. Conversely, if the debtor's income exceeds the state median, the repayment plan must span five years. Legally, the repayment plan cannot extend beyond five years. Throughout the duration of the plan, creditors are legally prohibited from initiating or continuing any debt collection actions against the debtor. This provision is designed to give the debtor a chance to reorganize their finances without the added pressure of ongoing collection activities.