Now, the process may sound a bit easier than it really is. Again, it is important to stress that the debtor has to meet the new rules and guidelines for filing for Chapter 7 bankruptcy, otherwise Chapter 13 might be an option. Chapter 13 will require that the debtor repay some, if not all, of their debt under a three to five year court-supervised plan. Filing for Chapter 13 will generally provide a homeowner the opportunity to save their home from foreclosure, for example.
It will also allow debtors to reorganize their secured debts under the life span of the Chapter 13 plan perhaps lowering payments. And while under Chapter 13 protection, the debtor makes monthly payments to a trustee who then makes payments to the creditors. This plan is somewhat like a consolidation loan where individuals have no actual contact with their creditors. If all payments and requirements are met within the specified time period, the Chapter 13 bankruptcy will be discharged.
