The aim of filing for bankruptcy under chapter 13 is for a debtor to get a chance to repay some or all his debts, in more favorable terms like low or no interest.
The debtor also gets a repayment period of three to five years.
Unlike Chapter 7 bankruptcy that involves liquidation of assets to repay creditors, this chapter of the bankruptcy code involves reorganizing debts.
This permits the debtor to use any income gained in the future to pay off debts.
This option is best suited for individuals that have a regular monthly income and are therefore able to request for reassessments.
Before you can decide if this is the best bankruptcy option for you, do some research, reconsider other cases and determine if they required filing under chapter 13.
You will also need to have a chapter 13 plan and fill out paperwork.
Devise ways in which you will deal with your secured creditors.
Appear for all the essential meeting with creditors and for court hearings.
Your property will be in the hands of creditors but you will have a new repayment plan that has been approved by the court.
This repayment plan takes effect within thirty to forty-five days after the case has began.
At this time, creditors are not allowed collect any claims from the debtor and are required to strictly follow the repayment program approved by the court.
An advantage of Chapter 13 is that the debtor gets a full plan discharge.
This happens when the debtor makes all their repayments.
Since the court approves a particular repayment plan, then that is what has to be followed even if the creditors disapprove it.