How Does a Chapter 13 Payment Plan Work?

There are different types of bankruptcy provided by the bankruptcy law. For personal bankruptcy, Chapter 7 and Chapter 13 are the usual bankruptcy options. Chapter 7 filers are interested in liquidation, whereas those who file for bankruptcy under Chapter 13 are after debt repayment.

Chapter 13 bankruptcy, known as the “Wage Earner Bankruptcy”, is designed for those individuals who are able to repay a portion of their debts over time. They can pay their debts in a Chapter 13 debt reorganization plan. Most individuals who seek bankruptcy protection under this bankruptcy chapter of the U.S. Bankruptcy Code are debtors who: