Chapter 13 bankruptcy is a type of personal bankruptcy protections that can help with a couple of different concerns a consumer facing overwhelming debt and financial struggles may need to address. Chapter 13 bankruptcy is a reorganization bankruptcy process for those who have a reliable source of income to repay debts according to a repayment plan worked out with the bankruptcy court.
To begin with, Chapter 13 bankruptcy can help with the everyday debts that keep the filing party up at night. The bankruptcy court will help the filing party develop a repayment plan that reorganizes their debts and allows them to repay them over a period of time which is usually 3 to 5 years. Once the filing party has completed the repayment plan, they will be granted a debt discharge which amounts to a fresh financial start for the filing party.
In addition, Chapter 13 bankruptcy may also be ale to help with concerns the filing party has associated with the foreclosure process or losing a family home. In some circumstances, the filing party may be able to find relief from the foreclosure process through Chapter 13 bankruptcy which can put off payments during the automatic stay which may then allow past due payments to become part of the repayment plan, permitting the filing party to get back on track and potentially save a family home.
There are, however, many complexities to be familiar with involved with the bankruptcy process so it is always useful for the filing party to understand the different options available to them and how they work. Once they are armed with that knowledge, they can determine which bankruptcy protection option will work best for them.