Chapter 13 Bankruptcy Definition

A type of consumer bankruptcy designed to help debtors reorganize their debts and pay all or a portion of them over three to five years. In Chapter 13 bankruptcy, debtors keep their property and use their income to repay creditors according to a monthly repayment plan. At the end of the three-to-five-year period, the balance of what the debtor owes on many types of debts is erased.