CHAPTER 13

CHAPTER 13
How it works
Chapter 13 allows the person who files to retain certain assets that would be liquidated in other bankruptcy proceedings, according to the American Bar Association. In most cases, a person is allowed to keep his home and car while making structured payments back to creditors.
A Chapter 13 bankruptcy does not mean a person can stop making current payments, and the money paid to a court-appointed trustee only addresses payments that are in arrears.
Most secured creditors, such as mortgages or car loans, are paid back fully during the allotted bankruptcy period; other debts can be paid partially.
A Chapter 13 bankruptcy remains on a person's credit rating for seven to 10 years, according to the bar association.