Definition of Chapter 13:
Chapter 13 refers to a U.S. bankruptcy proceeding in which debtors undertake a reorganization of their finances under the supervision and approval of the courts. Individuals and married couples, even if self-employed or operating an unincorporated business, are eligible to file for Chapter 13 bankruptcy.
Section of US bankruptcy code under which a debtors future earnings are collected by a court appointed trustee (receiver) and paid to unsecured creditors.
As part of the financial reorganization of Chapter 13, which is also known as a “wage earner’s plan,” debtors must submit and follow through with a plan to repay outstanding creditors within three to five years.
Protection from creditors granted to individuals who legally file for bankruptcy, providing for repayment of debts by a court-approved plan.
How to use Chapter 13 in a sentence?
- Chapter 13 is sometimes filed by debtors who want to save their homes from foreclosure.
- With a chapter 13 bankruptcy, also known as a “wage earner’s plan,” individuals pay an agreed-upon monthly amount to an appointed impartial trustee.
- Already, more than 60% of people who file under Chapter 13 dont complete their plans, meaning they could lose their homes and cars.
- As part of the financial reorganization of Chapter 13, the debtor must submit and follow through with a plan to repay outstanding creditors within three to five years.
Meaning of Chapter 13 & Chapter 13 Definition