A second type of bankruptcy is referred to as a Chapter 13 bankruptcy or the reorganization of debts. A Chapter 13 bankruptcy is not designed only to eliminate debts. Instead, it pays your creditors either in full or in part through monthly installments over three to five years. Your debts can thus be paid off over time, usually without interest.

Chapter 13 bankruptcy is most commonly used when a home is in foreclosure and time is needed to bring your late payments current. It may also be used to regain possession of a car that has been recently repossessed. A Chapter 13 bankruptcy is also beneficial if you have debts such as taxes or student loans which may not be eliminated in a Chapter 7 proceeding. If you have a certain level of income left over after paying your reasonable and necessary monthly expenses, you may not qualify for a Chapter 7 bankruptcy. Our Richmond bankruptcy lawyer can help determine if you are eligible for a Chapter 7 or Chapter 13.