Also called reorganization bankruptcy, Chapter 13 allows debtors to keep most of their assets and make arrangements to repay the debts, sometimes for less than what is still owed. You and your lawyer list your income, expenses, assets, and debts. Your Bankruptcy lawyer will then file the forms plus a proposed repayment plan describing how you intend to repay your debts over the next 3-5 years.

About a month after filing, you and your lawyer will attend a meeting of creditors where the trustee will look over your paperwork and ask any question. The trustee will oversee your entire case. After the meeting, you attend a hearing before a bankruptcy judge. If your plan is approved, the debtor must pay all disposable income, (whatever is available after necessities are paid for; food, shelter, etc.) to the trustees who then pay your creditors. If you make all your payments as outlined, then you often receive a discharge of any balance owed at the end of your case

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'Bankruptcy' the term that can raise the goose bumps of almost every individual who hears it and even a nervous breakdown to those who confront it. Bankruptcy stands for the situation when a person runs into huge debts and there is hardly any money left with him to repay those debts. The clouds of bankrupt situation can hover over anybody's life be it a successful business man who has never ever fathomed it or any greenhorn entrepreneur who had thought of going a long way ahead. There are several reasons behind this insolvency- Indebtedness-people usually take big loans from the banks and private companies in order to run successfully
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Chapter 7The potential chapter 7 debtor should understand that a straight bankruptcy case does not involve the filing of a plan of repayment as in chapter 13, but rather envisions the bankruptcy trustee's gathering and sale of the debtor's nonexempt assets, from which holders of claims (creditors) will receive distributions in accordance with the provisions of the Bankruptcy Code. Part of the debtor's property may be subject to liens and mortgages that pledge the property to other creditors. In addition, under chapter 7, the individual debtor is permitted to retain certain "exempt" property. The debtor's remaining assets are liquidated by
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