Chapter 13

Chapter 13 of the United States Bankruptcy Code provides a debtor with an opportunity to pay off their debts through a court approved payment plan. The Chapter 13 procedure allows a debtor to repay some or all of their debts over a period of three to five years. Typically, the Chapter 13 debtor possesses the ability to repay some or all of their debt but requires time to do so. The benefits received from filing a Chapter 13 bankruptcy petition is that a debtor can keep all of his property, including those valuable assets, which are not exempt.

One of the most common examples in which a debtor will utilize the Chapter 13 option is when the debtor is behind on their mortgage payments. Chapter 13 bankruptcy will stop a foreclosure proceeding and give the debtor the right to pay back past due payments over a period of up to sixty (60) months. As part of the payment plan, a debtor may be required to pay back a percentage (or all) of the unsecured debt. Upon the completion of the plan, the debtor will receive a discharge of debts and will be able to keep their property.