Chapter 13 bankruptcy is a personal bankruptcy option that allows the filing party to repay creditors according to a repayment plan developed with the help of the bankruptcy court. It differs from Chapter 7 personal bankruptcy because it does not involve the liquidation of assets but it is also important to keep in mind that it helps the filing party reorganize their debts so the amount they have to repay will also be worked out with the help of the bankruptcy court.
Chapter 13 bankruptcy is an option for those with a reliable source of income with which they can repay debts according to the established repayment plan to consider. The repayment plan will allow them to repay their debts over a period of time which is usually 3 to 5 years. Chapter 13 bankruptcy protection has the benefits of allowing struggling consumers to repay their debts over time and enjoy a debt discharge at the end of the process.
As with all personal bankruptcy options, there is also an automatic stay of all collection activities which requires creditors to cease collection actions while the bankruptcy process progresses. The personal bankruptcy process can minimize the contact the filing party has with creditors which can reduce the stress and strain associated with overwhelming debt. In addition, Chapter 13 bankruptcy options may be able to help with foreclosure and protecting a family home.
Personal bankruptcy options are worth considering for consumers who are seeking debt relief and the peace of mind that comes with it. Because different options are available for consumers in different situations, it is important for them to be familiar with what Chapter 13 bankruptcy and other bankruptcy options can do for them.