You have the option of registering for either Chapter 7 or Chapter 13 bankruptcy if you are deeply in debt. Everything will depend on the amount of money you bring in. Because Chapter 13 requires that you fulfill certain obligations, you will be unable to register for Chapter 13 if your income is inadequate.
If you have filed for Chapter 13, you will have a plan to repay your creditors within three to five years. During this period, your creditors cannot attempt to collect their debts from you except through the bankruptcy court. You will still be able to retain your property, while the creditors will receive less money than they are owed.
Sometimes it is preferable to apply for Chapter 13 rather than Chapter 7. For example, you will be able to prevent a bank from foreclosing on your home, and you will be able to reinstate a mortgage that has been accelerated once you have completed the program. Nonetheless, this will remain on your record for a minimum of ten years. You will also be unable to obtain additional credit while you are attempting to repay your obligations.
When you petition for Chapter 13, you will develop and submit a repayment plan to the courts. This will inform you that you must find methods to repay your debts. These methods include devoting all of your income to debt repayment for at least three years, ensuring that creditors will receive at least as much money as they would if you filed for Chapter 7, and providing a meaningful return to your creditors.""
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