Chapter 13 bankruptcy is a court-supervised debt repayment plan. In Chapter 13, you pay your “disposable income” (what’s left over after paying your living expenses) for 3 to 5 years to a bankruptcy trustee. In turn, the trustee distributes the money to your creditors according to the terms of your Chapter 13 plan.
Despite what many people believe, most debts do not need to be repaid fully in Chapter 13. Instead, you pay what you can reasonably afford to repay. If you make all of your payments to one of the Indianapolis Chapter 13 trustees and successfully complete the Chapter 13 plan, most or all of your remaining debt will be wiped out, just like in Chapter 7.
If you’re facing repossession or foreclosure, a Chapter 13 bankruptcy can help you save your car or home. Also, Chapter 13 can make a car loan more affordable by lowering the interest rate, extending the repayment time, and reducing the loan balance to the value of the car.