Chapter 13
 |
Definition of 'Chapter 13'A U.S. bankruptcy proceeding in which the debtor undertakes a reorganization of his or her finances under the supervision and approval of the courts. As part of the reorganization, the debtor must submit and follow through with a plan to repay outstanding creditors within three to five years. In most circumstances, the repayment plan must provide a substantial payback to creditors - at least equal to what they would receive under other forms of bankruptcy - and it must, if needed, use 100% of the debtor's income for repayment. |
|
Investopedia explains 'Chapter 13'Chapter 13 bankruptcy differs from the outright foreclosure of an individual's or business's assets (seen in Chapter 7 bankruptcy) and the expensive and complicated restructuring of debts seen in Chapter 11 bankruptcy. Essentially, Chapter 13 allows a debt-laden person or sole proprietorship that still has significant income to submit an orderly plan to the courts to pay back debts over a few years. Doing so can provide advantages to the debtor not found in other forms of bankruptcy, such as preventing the foreclosure of a residence. |
Related Definitions
Articles Of Interest
-
How To Survive A Bankruptcy Filing
Learn how to make filing for bankruptcy less painful so you can successfully rebuild your financial life. -
Bankruptcy Filing Changes That Could Affect You
When the economy is down, more people file for bankruptcy. Make sure you know about the changes that have been made to this process. -
Declaring Bankruptcy Is No Easy Out
Going bankrupt can help pull you out of debt, but it's rarely the best option. -
Should You File For Bankruptcy?
Find out how to determine whether this option will help or hurt your financial situation. -
An Overview Of Corporate Bankruptcy
If a company files for bankruptcy, stockholders have the most to lose. Find out why. -
What happens to a company's stocks and bonds when it declares chapter 11 bankruptcy protection?
Filing for chapter 11 bankruptcy protection simply means that a company is on the verge of bankruptcy, but believes that it can once again become successful if it is given an opportunity to reorganize ... -
Bankruptcy Protection For Your Accounts
Will the plan assets you've worked hard for be safe if you experience a personal financial crisis? -
What You Need To Know About Bankruptcy
Don't choose this last-resort option until you learn how it will affect your future. -
Changing The Face Of Bankruptcy
A 2005 law attempts to unmask fraudulent debtors and still save those who are struggling. Will it affect you? -
What are the differences between chapter 7 and chapter 11 bankruptcy?
Chapter 7 bankruptcy is sometimes also called liquidation bankruptcy. Firms experiencing this form of bankruptcy are past the stage of reorganization and must sell off any un-exempt assets to ...
