In Chapter 13 bankruptcy you pay some or all of your debts over an extended period of time (usually three to five years) through a court approved repayment plan. In return you keep your property. Read on to learn about eligibility for Chapter 13 bankruptcy, how to file a petition, what happens to your property and debts, and more.
When you file bankruptcy, each creditor (the person or company to which you owe money) has a claim against your bankruptcy estate. This means that if there's any money in your estate, the bankruptcy trustee will use it to pay the creditors' claims. To get paid, each creditor must file a proof of claim form indicating how much you owe and the type of debt.
If you are considering bankruptcy, usually the two main options are Chapter 7 and Chapter 13 bankruptcy. There are pros and cons to each type, but in some situations Chapter 7 is the better choice. And in others, Chapter 7 is the only choice.