Chapter 13 Personal Bankruptcy

A Chapter 13 bankruptcy, often referred to as a "reorganization," involves a repayment plan that sets forth with specificity how debtors will settle their debts over three to five years. The minimum amount of payment required depends on the debtor's income, balance, and the amount that unsecured lenders would have been paid if the debtor had filed for Chapter 7 bankruptcy. A Chapter 13 bankruptcy may restructure the debt in a plan which is manageable to repay the debt.
 
The debt to be paid back may be less than what is currently owed. In a Chapter 13 bankruptcy, a debtor proposes a repayment plan to the creditors over a three-to-five year period, offering a good faith proposal to pay all or part of the debt.