Under which bankruptcy chapter do individuals repay debts while still earning income?

Individuals who are seeking a way to manage their debts while still retaining a steady income typically turn to Chapter 13 Bankruptcy. This chapter allows individuals to create a repayment plan to pay back all or a portion of their debts over a specified period, usually three to five years.

The key aspect of Chapter 13 is that it accommodates those who have a regular source of income, enabling them to propose a structured plan to creditors that outlines how they will handle their outstanding debts while continuing to manage their daily living expenses. This makes it especially beneficial for individuals who have fallen behind on their financial obligations but still have the ability to make regular payments moving forward.

In contrast, Chapter 7 Bankruptcy is primarily for individuals who do not have sufficient income to repay their debts, leading to the liquidation of non-exempt assets to discharge their debts. Chapter 11 Bankruptcy is generally used by businesses to reorganize their debts but can also apply to individuals in higher income brackets, though it does not focus specifically on personal repayment plans like Chapter 13. Chapter 15 Bankruptcy deals with cross-border insolvency cases and is not applicable to individual debtors seeking to manage their debts through a repayment plan.