Editing Bankruptcy (section)

=====Chapter 13=====
{{main|Chapter 13, Title 11, United States Code}}
In Chapter 13, debtors retain ownership and possession of all their assets but must devote some portion of future income to repaying creditors, generally over three to five years.<ref name="ABA">{{cite web|title=Chapter 13 Bankruptcy|url=https://www.americanbar.org/groups/public_education/resources/law_issues_for_consumers/bankruptcy13_whatis/|publisher=American Bar Association|access-date=14 December 2020|date=11 April 2012|archive-date=5 December 2020|archive-url=https://web.archive.org/web/20201205085911/https://www.americanbar.org/groups/public_education/resources/law_issues_for_consumers/bankruptcy13_whatis/|url-status=live}}</ref> The amount of payment and period of the repayment plan depend upon a variety of factors, including the value of the debtor's property and the amount of a debtor's income and expenses.<ref name="bbasics">{{cite web|title=Chapter 13 – Bankruptcy Basics|url=http://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-13-bankruptcy-basics|publisher=United States Courts|access-date=19 October 2017|url-status=live|archive-url=https://web.archive.org/web/20171020210719/http://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-13-bankruptcy-basics|archive-date=20 October 2017}}</ref> Under this chapter, the debtor can propose a repayment plan in which to pay creditors over three to five years. If the monthly income is less than the state's median income, the plan is for three years, unless the court finds just cause to extend the plan for a longer period. If the debtor's monthly income is greater than the median income for individuals in the debtor's state, the plan must generally be for five years. A plan cannot exceed the five-year limit.<ref name="bbasics"/>

Relief under Chapter 13 is available only to individuals with regular income whose debts do not exceed prescribed limits.<ref>{{cite web|title=11 U.S. Code § 109 – Who may be a debtor|url=https://www.law.cornell.edu/uscode/text/11/109|website=Legal Information Institute|publisher=Cornell Law School|access-date=19 October 2017|url-status=live|archive-url=https://web.archive.org/web/20171019220224/https://www.law.cornell.edu/uscode/text/11/109|archive-date=19 October 2017}}</ref> If the debtor is an individual or a sole proprietor, the debtor is allowed to file for a Chapter 13 bankruptcy to repay all or part of the debts. Secured creditors may be entitled to greater payment than unsecured creditors.<ref>{{cite magazine |first1=Alexandra |last1=Dugan |first2=Erin |last2=Malone-Smolla | title = Bankruptcy Basics: Secured vs. Unsecured Claims | magazine = The National Law Review | date = 29 April 2021 | url = https://www.natlawreview.com/article/bankruptcy-basics-secured-vs-unsecured-claims | access-date = 26 October 2021 | archive-date = 26 October 2021 | archive-url = https://web.archive.org/web/20211026143553/https://www.natlawreview.com/article/bankruptcy-basics-secured-vs-unsecured-claims | url-status = live }}</ref>

In contrast to Chapter 7, the debtor in Chapter 13 may keep all property, whether or not exempt. If the plan appears feasible and if the debtor complies with all the other requirements, the bankruptcy court typically confirms the plan and the debtor and creditors are bound by its terms. Creditors have no say in the formulation of the plan, other than to object to it, if appropriate, on the grounds that it does not comply with one of the Code's statutory requirements.<ref>{{cite web|title=Federal Rules of Bankruptcy Procedure, Rule 3015. Filing, Objection to Confirmation, and Modification of a Plan in a Chapter 12 Family Farmer's Debt Adjustment or a Chapter 13 Individual's Debt Adjustment Case|url=https://www.law.cornell.edu/rules/frbp/rule_3015|website=Legal Information Institute|date=30 November 2011|publisher=Cornell Law School|access-date=19 October 2017|url-status=live|archive-url=https://web.archive.org/web/20171019220941/https://www.law.cornell.edu/rules/frbp/rule_3015|archive-date=19 October 2017}}</ref> Generally, the debtor makes payments to a trustee who disburses the funds in accordance with the terms of the confirmed plan.

When the debtor completes payments pursuant to the terms of the plan, the court formally grant the debtor a discharge of the debts provided for in the plan.<ref name="bbasics"/> However, if the debtor fails to make the agreed upon payments or fails to seek or gain court approval of a modified plan, a bankruptcy court will normally dismiss the case on the motion of the trustee.<ref>{{cite web|title=Federal Rules of Bankruptcy Procedure, Rule 1017. Dismissal or Conversion of Case; Suspension|url=https://www.law.cornell.edu/rules/frbp/rule_1017|website=Legal Information Institute|date=30 November 2011|publisher=Cornell Law School|access-date=19 October 2017|url-status=live|archive-url=https://web.archive.org/web/20171020032229/https://www.law.cornell.edu/rules/frbp/rule_1017|archive-date=20 October 2017}}</ref> After a dismissal, creditors may resume pursuit of state law remedies to recover the unpaid debt.