Chapter 13 bankruptcy is a legal process where an individual with regular income repays some or all of their debt over a three-to-five year period. Under Chapter 13, you’ll make monthly payments for an amount determined by the Bankruptcy Court. Your Chapter 13 Trustee will supervise the case and administer the payments to your creditors.
If you complete your payment plan as a greed, your remaining debt will be discharged, meaning you’re no longer legally liable to pay.
Like Chapter 7 bankruptcy, Chapter 13 can cause a significant drop in your credit scores, and you’ll have to pay court fees and potentially legal fees in order to file.
For help understanding the pros and cons of Chapter 13 bankruptcy, or to complete your court-ordered bankruptcy counseling, reach out to an NFCC-certified credit counselor.