Chapter 13 bankruptcy is one option that can help with debt and struggles associated with too many bills and the stress that comes along with overwhelming debt. Chapter 13 bankruptcy is a reorganization bankruptcy option that allows the struggling consumer to reorganize their debts and repay them over a period of time.
Chapter 13 bankruptcy is an option available to a filing party that has a reliable source of income so they can repay debts according to the repayment plan worked out with the bankruptcy court. Debts that aren’t repaid but were addressed by the repayment plan can be discharged. The filing party typically has 3 to 5 years to repay debts according to the repayment plan worked out with the bankruptcy court.
In addition, if the filing party is unable to repay their debts according to the repayment plan, they may be able to convert their bankruptcy filing to a Chapter 7 liquidation bankruptcy filing. There are requirements to qualify for that type of bankruptcy as well so it is important to be familiar with all of the different personal bankruptcy options and how to qualify for each. Chapter 7 bankruptcy is available to those who do not qualify for Chapter 13 bankruptcy and generally do not have a reliable source of income.
Bankruptcy protection options are available to help struggling consumers and are a valuable resource for those seeking debt relief and a fresh financial start. Fully understanding the options to determine what is best option for the party considering bankruptcy is an important step towards debt relief.