Which bankruptcy chapter is used by people with regular income who want to pay debts?

Which bankruptcy chapter is used by people with regular income who want to pay debts?

• A. Chapter 7
• B. Chapter 11
• C. Chapter 13
• D. Chapter 9

Answer: (C)

If you have a steady source of income and want to pay what you owe, Chapter 13 is the option that fits. It creates a court-approved repayment plan that lasts typically three to five years, funded from your disposable income. A bankruptcy trustee collects your payments and distributes them to creditors, and you can usually keep your home and other assets as long as you stay current with the plan. After completing the plan, any remaining unsecured debt may be discharged. This differs from Chapter 7, which involves liquidation of non-exempt assets, and from Chapter 11, which is a reorganization often used by businesses or individuals with large or complex debts. Chapter 9 applies to municipalities.

If you have a steady source of income and want to pay what you owe, Chapter 13 is the option that fits. It creates a court-approved repayment plan that lasts typically three to five years, funded from your disposable income. A bankruptcy trustee collects your payments and distributes them to creditors, and you can usually keep your home and other assets as long as you stay current with the plan. After completing the plan, any remaining unsecured debt may be discharged.

This differs from Chapter 7, which involves liquidation of non-exempt assets, and from Chapter 11, which is a reorganization often used by businesses or individuals with large or complex debts. Chapter 9 applies to municipalities.