What is the main feature of Chapter 13 bankruptcy?

Chapter 13 bankruptcy is specifically designed for individuals who wish to reorganize their debts while maintaining their property. This type of bankruptcy allows a debtor to establish a repayment plan that is approved by the court, typically lasting three to five years. During this time, individuals can retain their assets—such as their home and car—while making regular payments to a bankruptcy trustee, who distributes the funds to creditors based on the agreed-upon plan.

This process is advantageous for individuals facing overwhelming debt, as it provides them a structured framework to manage their financial obligations without the necessity to liquidate their assets, which is common in Chapter 7 bankruptcy. The court's oversight ensures that the repayment plan is fair and that creditors receive payments according to the established terms, allowing individuals to regain control over their financial situation while working towards becoming debt-free.