What is the purpose of Chapter 13?
Reorganization. Chapter 13 bankruptcy is filed by individuals who want to pay off their debts over a period of three to five years. This type of bankruptcy appeals to individuals who have non-exempt property that they want to keep.
Who can file?
It is also only an option for individuals who have predictable income and whose income is sufficient to pay their reasonable expenses with some amount left over to pay off their debts.
Unlike the time restriction for people with multiple Chapter 7 filings, a debtor can file a Chapter 13 if they received a discharge under Chapter 7, 11, or 12 more than 4 years prior.
Is it possible to rebuild my credit?
Absolutely. If you are hit with a sudden, unexpected surge of expenses, it’s usually better to declare bankruptcy right away instead of using a “credit counselor” or waiting to see if you can get out of debt on your own.
Rebuilding your credit starts immediately after your bankruptcy discharge. You can start with a secured credit card. Two years after discharge, debtors are eligible for mortgage loans with terms comparable to those with a similar financial profile who have not filed bankruptcy.
The IRS has taken action against a number of non-profit credit counseling groups for abuse.