Chapter 13 bankruptcy, sometimes referred to as wage earner’s bankruptcy, is a personal bankruptcy option that can help struggling consumers repay their debts over time. Because of the potential benefits of Chapter 13 bankruptcy, struggling consumers considering filing for bankruptcy should be familiar with it, how to qualify and how it works.
The basics of Chapter 13 bankruptcy are that it provides an option for filing parties with a reliable source of income to repay their debts according to in installment plan worked out with the bankruptcy court. The bankruptcy court will help the filing party develop a reorganization plan that can help them repay their debts, while hanging on to their assets, over a longer period of time which is usually 3 to 5 years. If the filing party’s income is less than the median income in their state, the repayment plan will usually be 3 years.
Chapter 13 personal bankruptcy protection comes with the usual protections you should be familiar with when considering filing for bankruptcy. An automatic stay protects the filing party from creditors collection actions while their bankruptcy process progresses which can be a weight off the minds of filing parties. In addition, they are protected by the debt discharge at the end of the bankruptcy process which can help them enjoy the debt relief they are seeking.
Personal bankruptcy protections are available for struggling consumers in different situations and with different goals for the process. Chapter 13 bankruptcy is one option to consider when the stress and challenges of overwhelming debt get to be too much.