Chapter 13 Bankruptcy FAQ

Questions:

• What is Chapter 13 bankruptcy?
• How much of my debt will I have to repay if I file for Chapter 13 bankruptcy?
• How long will my repayment plan last if I decide to file for bankruptcy under Chapter 13?
• We're facing foreclosure. If we file for Chapter 13 bankruptcy, can we keep our home?
• My only income is from retirement benefits. Can I use those to fund a Chapter 13 repayment plan?
• Along with other debt, I owe back taxes to the IRS. Can Chapter 13 bankruptcy help?

Answer:

What is Chapter 13 bankruptcy?

In a Chapter 13 bankruptcy, you use your income to pay some or all of what you owe to your creditors over time -- from three to five years, depending on the size of your debts and income. In return, you may keep your property.

The most important part of a Chapter 13 bankruptcy is the repayment plan, which describes in detail how (and how much) you will pay for each of your debts. In order for your bankruptcy to go forward, the court must approve your repayment plan and also determine that you have enough income to meet your payment obligations under the plan. To learn more about Chapter 13 bankruptcy, see Nolo's article An Overview of Chapter 13 Bankruptcy.