What is a Chapter 13 Bankruptcy?

What is a Chapter 13 Bankruptcy?

Under a Chapter 13 Bankruptcy process, your debts are restructured to enable you to pay off your creditors with your future earnings. A Chapter 13 Bankruptcy Plan will be devised for you to repay your creditors. You will pay them off, usually with no interest, over a period of three to five years.

The monthly payment is based in part on your income and your ability to pay. The creditors will be paid off at different rates depending on your case. Depending on your income you will be held liable for all or just a portion of your debts.

In some cases the Chapter 13 trustee will pay the creditors as little as 10% of the amount you owe. Once the Chapter 13 Bankruptcy is complete the unsecured creditors can never ask for any more.

In a Chapter 13 Bankruptcy you will make one payment to a Chapter 13 trustee. The trustee will use that money to pay all of your creditors. This will give you one easy payment to make each month.

The goal of the Chapter 13 Bankruptcy is to give you a reasonable payment that will put you back on the right track and give you a set date when you know you will be out of debt.