Filing for bankruptcy relieves you of the burden of crushing debt. There are different bankruptcy options available to you as a consumer, and each offers you specific benefits.

If your income is regular but not sufficient to pay all your bills, Chapter 13 may be a good filing option for you. Because of the approach it uses to discharge your debt, another name for Chapter 13 is reorganization bankruptcy. Here are some of the things that Chapter 13 allows you to do.

1. Consolidate your debt

Chapter 13 bankruptcy works similarly to a debt consolidation loan. Instead of making payments to multiple creditors every month, you submit one payment per month to your trustee, who then distributes it among your creditors. Chapter 13 is different from a loan in that you do not have to pay interest.

2. Keep your property

Unlike Chapter 7 bankruptcy, there is no liquidation involved in Chapter 13. In other words, because Chapter 13 reorganizes your debt, there is no need to sell any assets to pay back what you owe, and you can retain your property.

3. Make payments over time

When you file for Chapter 13, you will create a repayment plan specifying how much you will pay per month. You must meet this monthly obligation for a period between three to five years.

4. Pay less than what you owe

With a few exceptions, Chapter 13 bankruptcy discharges most of your debts. This means that even if you have a balance remaining after fulfilling your obligations under the repayment plan, you are no longer responsible for paying it back.

5. Avoid creditor harassment

Once you file for bankruptcy, an automatic stay goes into effect. This protects you from harassment by creditors and prevents them from contacting you at all.