Personal Bankruptcy: Chapter 13 Bankruptcy can be recommended to stop foreclosures and allow you time to pay off the debt. It uses a monthly plan overseen by the bankruptcy court. Normally the payoff payment period for a Chapter 13 Bankruptcy is 3 to 5 years depending on the situation.
With Chapter 13 Bankruptcy you will:
• Avoid Foreclosure
• Be left with a better credit report than a Chapter 7 Bankruptcy
• Be able to reschedule secured debts (the mortgage where you reside excluded) and
extend them over the life of your Chapter 13 Bankruptcy plan to lower payments
• Protect 3rd parties like co-signers.
• Have something like a consolidation loan.
• Have no contact with creditors – The chapter 13 trustee takes care of this.
If your income is above the median for your family in your state, you can file for Chapter 13 Bankruptcy. This type of bankruptcy will require liquid assets, but will allow you to keep assets like your car. When your income is above the median, you cannot file a Chapter 7 Bankruptcy.