Chapter 13 bankruptcy is a type of bankruptcy available to individuals with regular income who want to restructure their debts and establish a repayment plan.
Here are some key features of Chapter 13 bankruptcy:
- Debt Repayment Plan: In Chapter 13 bankruptcy, the debtor proposes a repayment plan to the court, outlining how they will repay their debts over a period of three to five years. The plan takes into account the debtor's income, expenses, and the amount owed to creditors.
- Asset Protection: Asset Protection: Unlike Chapter 7 bankruptcy, Chapter 13 allows debtors to retain their assets while repaying creditors. The debtor can keep their home, car, and other assets as long as they adhere to the terms of the repayment plan.
- Debt Adjustment: Debt Adjustment: Chapter 13 bankruptcy can help debtors catch up on missed mortgage or car payments, prevent foreclosure or repossession, and address other types of debt. It allows for the restructuring of secured and unsecured debts, such as credit card debt and medical bills.
- Trustee Oversight: A Chapter 13 trustee is appointed to oversee the repayment plan and ensure compliance. The debtor makes regular payments to the trustee, who then distributes the funds to creditors according to the plan.
- Discharge of Remaining Debt: Upon successful completion of the repayment plan, any remaining eligible debts are typically discharged, meaning the debtor is no longer legally obligated to repay them.
Chapter 13 bankruptcy provides individuals with a structured approach to repay their debts over time, based on their income and expenses.
It offers an opportunity to address financial challenges, catch up on missed payments, and protect assets from being liquidated. It is important to
consult with our bankruptcy attorney to determine eligibility and understand the specific requirements and implications of filing for Chapter 13 bankruptcy.
