Chapter 13 bankruptcy is also known as a reorganization bankruptcy.
Individuals who want to pay off their debts over a period of three or five years file chapter 13 bankruptcy. This type of bankruptcy appeals to individuals who have non-exempt property that they want to keep. It is also only an option for individuals who have predictable income and whose income is sufficient to pay their reasonable expenses with some amount left over to pay off their debts.
One of the main purposes of bankruptcy legislation is to afford the opportunity to a person who is hopelessly burdened with debt to free himself of the debt and start a “fresh new lease on life.”