Which type of bankruptcy proceeding allows an individual debtor to recognize the debt by implementing a repayment plan?

The primary focus of Chapter 13 bankruptcy is to enable individual debtors to create a structured repayment plan to pay off their debts over a specified period, typically three to five years. This type of bankruptcy is often sought by individuals with a regular income who wish to keep their assets while gradually repaying creditors.

In a Chapter 13 proceeding, the debtor proposes a repayment plan that outlines how they will make monthly payments to a bankruptcy trustee, who then distributes the funds to creditors. This process allows individuals who may have fallen behind on their financial obligations due to unforeseen circumstances to reorganize their finances, catch up on past-due payments, and retain their property, such as their home.

Chapter 7, on the other hand, involves liquidating the debtor's non-exempt assets to pay off creditors, which does not include a repayment plan. Chapter 11 is primarily designed for business reorganizations, allowing both individual and business debtors to propose a reorganization plan, but it is less common for individual debtors than Chapter 13. Chapter 12 is specifically tailored for family farmers or fishermen, providing a similar structure as Chapter 13 but focused on agricultural debt.

Chapter 13 is particularly beneficial for individuals seeking to manage their debt without losing