Chapter 13 bankruptcy, also known as a wage earner’s plan, allows individuals with regular income to reorganize their debts and create a court-approved repayment plan, usually lasting 3 to 5 years. Unlike Chapter 7, it does not involve liquidating assets; instead, debtors keep their property and repay creditors over time based on their income and expenses.

This type of bankruptcy is ideal for those who have fallen behind on secured debts like mortgages or car loans and want to avoid foreclosure or repossession. At the end of the repayment period, remaining eligible unsecured debt may be discharged. Chapter 13 can help individuals regain control of their finances while protecting valuable assets and stopping creditor actions like wage garnishment or lawsuits.