Chapter 13 Bankruptcy is also known as a reorganization bankruptcy. Chapter13 bankruptcy is filed by individuals who want to pay off their debts over a period of three to five years. This type of bankruptcy appeals to individuals who have non-exempt property that they want to keep. It is also only an option for individuals who have predictable income and whose income is sufficient to pay their reasonable expenses with some amount left over to pay off their debts.

Title 11, which is the United State Bankruptcy Code, is broken down into Chapters. "Chapter 13" of Title 11 deals with adjustments of debts of an individual with regular income, i.e., consumer reorganization.

One advantage is the ability to stop a foreclosure on your house, and to have a mortgage that has been accelerated declared reinstated upon bankruptcy plan completion.

Since Chapter 13 involves paying back at least some of your debts over time, it usually takes at least three years to complete a Chapter 13 bankruptcy.

A Chapter 13 bankruptcy is often called a personal reorganization. The focus of a Chapter 13 bankruptcy is the reorganization plan, which you and your attorney will create. In the reorganization plan you lay out your budget and show how much extra money you have left over each month to pay off your debts. This money is called disposable income. You then promise to pay this amount each month for a period of time (usually 3 to 5 years).

A chapter 13 bankruptcy provides you up to three years to pay off your debts. The payments are made through a court appointed trustee. Chapter 13 bankruptcy is generally not suitable for most people since it does not give you a clean breakaway from your debts and since may people who start with a chapter 13 end up filing a chapter 7 anyway. Chapter 13 tends to work for people who are facing foreclosure on the house.

You must reside or have a domicile, a place of business, or property in the United States; you must not have had a bankruptcy filing dismissed for cause within the last 180 days; you must have a regular income; and your total debts cannot exceed $1,446,550 (secured debts cannot exceed $1,010,650 and unsecured debt cannot exceed $336,900).

Chapter 13 bankruptcy is a court ordered reorganization of personal finances arranged to compensate creditors for any outstanding debts. Debtors typically have five years to pay out this negotiated settlement.

A Chapter 7 Bankruptcy is called a "liquidation" whereas a Chapter 13 Bankruptcy is called a "reorganization." Each is generally discussed below. In a Chapter 7 Liquidation, the debtor assembles all assets, sets aside exempt assets, and decides what to do with secured assets.

Answer: Chapter 13 bankruptcy is a debt adjustment procedure for INDIVIDUALS ONLY, INCLUDING JOINT CASES BY HUSBANDS AND WIVES. If you are behind (in arrears) on your mortgage payments on your home or other real property, you may be able to use Chapter 13 to keep the property from being sold in foreclosure, and be able to spread payments to pay off your mortgage arrearage over the whole life of your Chapter 13 plan of repayment, which can be 3 years, or even as long as 5 years.

Chapter 13 plans must pay 100% or pay all disposable income for at least three years after the date of the first payment under the plan. If you want to pay your case off before the three years then you need to pay 100%. If you want to pay off in excess of the 3 years, then you can complete the plan by paying disposable income for the period that you have been in. For example, if a debtor has a 10% plan with a needed to complete figure of $100.00, he has to pay the $100.

The most common reasons to file a Chapter 13 bankruptcy are: stop foreclosure, save your car, save your business, debt consolidation, repay student loans, IRS debt and other non-dischargeable debts and for those who have filed a Chapter 7 Bankruptcy in the last 6 years.