Chapter 13 Bankruptcy is a legal process that allows individuals with regular income to restructure their debts through a court-approved repayment plan, typically lasting 3 to 5 years. Unlike Chapter 7, which liquidates assets, Chapter 13 helps debtors keep their property while making manageable payments to creditors. This option is beneficial for those facing foreclosure, repossession, or overwhelming debt, as it can stop collection actions and provide a path to financial stability. It also allows for the consolidation of debts into a single, structured payment, potentially reducing interest rates and overall financial strain. Additionally, it can help individuals catch up on missed mortgage or car payments without losing their assets.
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