Under chapter 13 bankruptcy, a debtor does not get an immediate “fresh start,” but rather makes a concerted, years-long effort to pay back their debts as well as they are able. When a debtor files for chapter 13 bankruptcy, he or she proposes a 3-5 year repayment plan to creditors offering to pay off all or part of the debts from the debtor’s future income. Chapter 13 has been used to prevent house foreclosure and make up missed car or mortgage payments. This chapter also helps you to pay back taxes and keep valuable non-exempt property.
Chapter 13 bankruptcy is generally a better idea than chapter 7 bankruptcy for debtors who have a stable income and a high amount of non-exempt assets. However, there are qualifications and exceptions to keep in mind. To learn whether you would qualify and if chapter 13 is the best option for you, it’s best to contact a bankruptcy lawyer.