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  Chapter 13 Bankruptcy

Chapter 13 is a form of bankruptcy that allows a person to keep their property by agreeing to pay their creditors out of future income over a three to five year period. Guided by his attorney, the debtor must write a payment plan, which must be approved by the bankruptcy court.

Once the payment plan has been established, the creditors may not attempt to collect any debt during the payment period other than that allowed by the bankruptcy court. The creditors typically end up with less money than they are owed, and the individual's credit report carries a record of the bankruptcy for a period of ten years, which greatly affects that person's ability to borrow money.