Chapter 13 bankruptcy provides one path for struggling consumers to enjoy debt relief. While there are different personal bankruptcy options for struggling consumers in different situations, Chapter 13 bankruptcy is just one option to understand but can help struggling consumers reorganize their debts and enjoy a fresh financial start.
Chapter 13 bankruptcy allows the filing party the opportunity to reorganize their debts into a repayment plan they can pay over time. The filing party will need a reliable source of income to repay their debts but the repayment plan will give them 3 to 5 years to repay their debts. They may also be able to repay their debts at a lower cost. Provided they comply with the repayment plan worked out with the help of the bankruptcy court, they can enjoy a debt discharge at the end of the process.
There is also flexibility in the personal bankruptcy process. If the filing party enjoys an increase in income, they can simply repay the debts and no longer have to follow the repayment plan; likewise, if the filing party experiences a reduction in income, they can switch to Chapter 7 personal bankruptcy protection. Chapter 7 bankruptcy protection is another personal bankruptcy option to consider which is a liquidation bankruptcy option. Bankruptcy exemptions, however, protect some property from the process.
Personal bankruptcy protections are not one size fits all which is why struggling consumers in different situations should be familiar with different options that may help them. It is worth it for those facing overwhelming debt to understand their options to help with the stress and strain of living that way.