Chapter 13 Bankruptcy Legal Meaning and Definition

Here is a simplified definition of the legal term Chapter 13 Bankruptcy.

Chapter 13 Bankruptcy (noun phrase): A method of bankruptcy where an individual's financial assets and debts are reorganized by law. It allows the debtor to use their regular income to create a repayment plan for creditors over a 3 to 5 year period. During this time, creditors cannot pursue further collection. Unlike other types of bankruptcy, it does not require liquidation of personal assets to settle the debts. Full repayment to creditors may not occur.