Which bankruptcy chapter is designed for individual debt adjustment?

Which bankruptcy chapter is designed for individual debt adjustment?

• A. Chapter 7
• B. Chapter 11
• C. Chapter 12
• D. Chapter 13

Answer: (D)

The key idea is debt adjustment through a court‑supervised repayment plan. Chapter 13 lets individuals with regular income propose and complete a plan to repay all or part of their debts over 3 to 5 years. This approach focuses on restructuring and paying back debt rather than liquidating assets, so you can keep your property while catching up on missed payments and gradually paying unsecured creditors a portion of what you owe. Upon successful completion of the plan, remaining eligible debts are discharged. This is specifically geared toward individuals, as opposed to Chapter 7, which is liquidation; Chapter 11, which is a business-focused reorganization (though individuals can file under it in some cases); and Chapter 12, which is limited to family farmers and fishermen.

The key idea is debt adjustment through a court‑supervised repayment plan. Chapter 13 lets individuals with regular income propose and complete a plan to repay all or part of their debts over 3 to 5 years. This approach focuses on restructuring and paying back debt rather than liquidating assets, so you can keep your property while catching up on missed payments and gradually paying unsecured creditors a portion of what you owe. Upon successful completion of the plan, remaining eligible debts are discharged.

This is specifically geared toward individuals, as opposed to Chapter 7, which is liquidation; Chapter 11, which is a business-focused reorganization (though individuals can file under it in some cases); and Chapter 12, which is limited to family farmers and fishermen.