What Is Chapter 13 Bankruptcy?

This is different from a Chapter 7 bankruptcy and is sometimes called a "payment plan" bankruptcy. Under a Chapter 13, the idea is that you are going to pay monthly toward your bills for a period of time, usually three to five years, in order to pay off a portion of your debt and, at the end of it, the rest of your debt is "discharged" and you do not owe it anymore. You make periodic payments to the bankruptcy court itself and the court pays your bills for you.

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