Chapter 13 Bankruptcy is what is known as reorganization bankruptcy. Chapter 13 bankruptcy is filed by individuals who want to pay off their debts over a period of three to five years. This type of bankruptcy appeals to individuals who have non-exempt property that they want to keep as well as to those who want to forestall a foreclosure or repossession of property. It is only an option for individuals who have predictable income and whose income is sufficient to pay their reasonable living expenses with some amount left over to pay off their debts.

The debtor will file a bankruptcy petition that includes schedules of the debtor's assets and liabilities. Then the debtor will have a limited amount of time to file a repayment plan with the court. Once the plan is filed, the person's creditors and the Chapter 13 bankruptcy trustee will have a limited amount of time to object to the plan. If there are no objections and the plan is confirmed, the debtor and the creditors are bound by it. Definition from http://www.alllaw.com/articles/bankruptcy/article17.asp