Filing Chapter 13 Bankruptcy
Almost all bankruptcy cases not filed under Chapter 7 are filed under Chapter 13. The latter is also referred to as “Reorganization Bankruptcy” and it is often the optimal choice if the debtor has too many non-exempt properties to lose if he chooses the former. It works best with individuals who have a steady fixed income who are confident they have enough left after necessities to pay their debts.
HOW IT WORKS
The Bankruptcy Code under Chapter 13 is about the reorganization of the consumer’s debts. A payment plan or Chapter 13 plan is created according to which the debtor pays a portion of his total debts in a period of three to five years. Once the debtor manages to fulfill the terms of the plan in good faith, his remaining debts are written off.