Chapter 13 Bankruptcy
Chapter 13 bankruptcy is often regarded as the working man’s bankruptcy, largely because they keep possession and ownership of all their assets, but must repay debts from their work income. Typically, a repayment plan is three to five years in length.
The amount of payment and how long the bankruptcy process lasts depends on a number of factors, including the value of the debtor’s property, amount of his or her expenses, and income. Secured debtors in a repayment plan for Chapter 13 bankruptcy are usually entitled to receive more money than unsecured creditors, like credit card companies.
In most cases, Chapter 13 bankruptcy relief is only offered to people who have a regular income and whose debts are not over a certain limit. An individual or a sole business owner may file for Chapter 13, and as a part of that process, they draft a payment plan that pays the debt off within 3 to 5 years. The plan cannot be longer than five years, and if the person’s wage is less than the median for the state of residence, the plan will be for three years, unless the court sees fit to extend it. If the monthly income is greater, the plan is usually for five years.