Which Type of Bankruptcy Is Best for My Situation?

Chapter 13 is a three-to-five-year debt repayment plan that is most often claimed by individuals. The goal of Chapter 13 is to enable debtors who still have income a means to rehabilitation,

provided they fulfill a court-approved plan. The assets of the debtor are protected and a wider range of debts become dischargeable. In return, the debtor must make a monthly payment of his or her disposable income, over a three-to-five-year period. During this time, the creditors cannot attempt to collect the previously incurred debt except through the court. Usually, the individual gets to keep his or her property, and the creditors end up with partial payment. Chapter 13 is often a good alternative in cases where credit counseling or Chapter 7 are not options, and where there is enough disposable income to fund a viable plan. Some of the advantages to the debtor in filing Chapter 13 versus Chapter 7 are that it stops foreclosure and offers the possibility of a discharge of debts of kinds not dischargeable under Chapter 7.