What does it mean to Reorganize Debt in Chapter 13 Bankruptcy?

Chapter 13 is sometimes thought of as a middle ground in bankruptcy – a balance between you receiving some debt relief and your creditors receiving some payment. Reorganizing debt means that you will repay all or most, you will get caught up, and you will develop a plan for staying current.

In Chapter 13 bankruptcy, the court trustee helps to determine a plan by which you will continue to pay your debts. This repayment often includes getting caught up when you are behind. By analyzing your finances, the court will determine what amount you pay and to whom you will pay it. These plans typically last for three to five years.

During the Chapter 13 repayment period, you are protected from harassment, foreclosure, and repossession, and your creditors are assured of exactly what amount of repayment they can expect. It is literally a new organization of your finances that lays a solid foundation for your future success.

To make the most of Chapter 13 reorganization, be sure to consult with experienced bankruptcy attorneys such as The Frutkin Law Firm, PLC, in Phoenix, Arizona.