Chapter 13 Bankruptcy
Another common filing for private individuals or for smaller businesses is the Chapter 13 bankruptcy. In this filing, debtors ask the federal court for a rearrangement of their debts and a chance to pay off owed amounts with a single payment that is divided up among creditors each month. This type of bankruptcy is popular with people who do not want to lose certain assets, such as their homes, rental properties, cars, and consumer goods. It also helps people who have relied on co-signers to help them obtain assets.
Because the laws surrounding laws surrounding Chapter 13 filings change often, people are advised to rely upon experienced bankruptcy counsel prior to filing. Their counsel can help them file the necessary paperwork and compile a list of their debts to present to the court. People also must provide proof of how much money they make, as well as to what liquid assets they have access. This information helps the court decide if these clients can successfully complete a repayment plan or if it would be better if they file for total liquidation of their debts.