What is Chapter 13 & How Does it Work?
Chapter 13 bankruptcy may be able to completely eliminate your credit card, pay day loan, repossession, medical and other debts or you may back some of this debt with an interest-free repayment plan that you can actually afford, one that you can pay off over time (usually 3 to 5 years). It is overseen by the Bankruptcy Court to make sure everyone plays by the rules, and it allows you to pay your creditors back on terms that are favorable to you, without any interest. Or, you may be able to completely eliminate this debt in a Chapter 13 without paying it back. This is different from a Chapter 7 filing, which may result in the liquidation of your non- exempt assets in order to pay back creditors. Chapter 13 bankruptcy also allows you to keep your home or your car, even if you have been behind on payments.
Furthermore, if you are required to pay back some of your debt in a Chapter 13, all of your creditors are paid with a single monthly payment to the Bankruptcy Trustee rather than multiple payments to different creditors due at different times during the month.
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The anatomy of a Chapter 13 Bankruptcy
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Trustee Kathleen A. Leavitt- Chapter 13 Handbook
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Chapter 13 and Personal Injury Cases
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Can I buy a house while in Chapter 13 Bankruptcy?
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