Chapter 13 bankruptcy is one of the two major types of personal bankruptcy protection. It involves working with the bankruptcy court to develop a repayment plan that allows the filing party to repay their debts over a period of time which is typically three to five years. At the end of the process, they can enjoy debt relief.
Chapter 13 bankruptcy is generally available to those that have debt they are unable to manage but also have a reliable source of income with which they can repay their debts if given the opportunity to reorganize their debts and repay them over time. Once the filing party has filed for personal bankruptcy protection, and automatic stay will stop all creditor collection actions while the bankruptcy process progresses. This allows the filing party the time to develop their debt reorganization plan.
Provided the filing party qualifies, so they should be familiar with those requirements, the filing party can then repay their debts over time and will not be required to liquidate any of their property to repay debts. Once the repayment plan is complete, the filing party will then enjoy a debt discharge and be able to get on with their life debt free. Chapter 13 bankruptcy provides important protections to consumers struggling with debt but with some resources available to repay them with.
There are different types of personal bankruptcy protection available to help filing parties enjoy debt relief which is why they should be knowledgeable about the different options and the option to start with one type and switch to another. This will allow them to select the best option for them to enjoy debt relief.
