Chapter 13 Bankruptcy

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Chapter 13 bankruptcy is sometimes known as a “wage earner’s bankruptcy,” and it’s designed for people who have a steady income and who can pay some or all of their debts back to their creditors under a court-approved payment plan. The advantage is that you aren’t forced to liquidate or lose your assets to pay your creditors. An individual who owns a small business may also file Chapter 13 to pay off debts with future revenue. A Chapter 13 repayment plan provides for a portion of future income to be paid to a trustee, who in turn makes payments on all or part of your debts over a long period of time. The period is usually three years, but no longer than five. Spouses can file a joint case with a single petition in Chapter 13, but a joint case must be voluntary. This means you can’t file a joint case without your spouse’s consent. Consult with a bankruptcy attorney to find out whether Chapter 13 bankruptcy is right for you.