Chapter 13 Bankruptcy
A chapter 13 bankruptcy is a reorganization proceeding and can help people to save their homes, cars, and even create a payment plan for taxes. In a chapter 13 case, the debtor usually pledges the next three to five years’ disposable income to the bankruptcy plan. Past due house, car, or tax payments can be made over the life of the plan. Depending on the type of debt and the debtor’s income, creditors may receive no payment, a few cents on the dollar, or full payment. This type of case is more complicated than a chapter 7, but often allows results not available in chapter 7s, such as stripping a second lien from a home. Very few debtors can understand and navigate the requirements of a chapter 13 bankruptcy on their own. An experienced attorney can be essential.