Chapter 13 Bankruptcy

When an individual does not qualify for Chapter 7 bankruptcy, he/she is most likely eligible to file for Chapter 13.  In most cases, individuals who file for Chapter 13 bankruptcy have suffered from a temporary loss that has put them too far behind in debt to catch up on their own. Chapter 13 bankruptcy does not completely erase debt, but consolidates debt and restructures it into a monthly payment plan that is affordable. Usually people awarded Chapter 13 make sufficient income to cover any living expenses, but not enough to pay off debts in full. When chapter 13 is awarded, the debtor pays for living expenses first, and then any left over money is used to repay creditors, even if it’s just pennies on the dollar. Chapter 13 bankruptcy cases typically last for three to five years from initial filing to discharge, depending on the individual’s ability to pay.

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