The bankruptcy process may seem intimidating at first until the party considering it understands personal bankruptcy protections. There are generally two types of personal bankruptcy protection and Chapter 13 bankruptcy is one type.
Chapter 13 bankruptcy is best for filing parties that have a reliable source of income to repay debts with but wish to reorganize their debt to repay it over a more manageable period of time and according to a more manageable repayment plan. Parties considering bankruptcy who do not qualify for Chapter 13 protections should not despair because different personal bankruptcy options are available. The Chapter 13 bankruptcy process allows a party who qualifies to reorganize their debts to repay over a repayment period, which is usually three to five years, and they are then able to enjoy a debt discharge at the end of the process.
The process begins with filing a petition for bankruptcy which triggers an automatic stay which prevents further creditor collection actions while the bankruptcy process progresses. The filing party then has time to develop a reorganization plan with the bankruptcy court that they are then able to follow to ultimately enjoy debt relief. The repayment plan is worked out along with and supervised by the bankruptcy court.
Personal bankruptcy protections, including Chapter 13 bankruptcy, are an important resource and consumer protection for many struggling consumers to understand and be familiar with. Knowing which options is best, based on the circumstances, needs and goals of the filing party, can help them find the best option to enjoy debt relief and all that entails.
