Individuals in California who experience the pressure of unmanageable debt may turn to bankruptcy to provide themselves with a fresh start. Chapter 13 is one type of bankruptcy available to individuals. This bankruptcy option provides immediate financial relief by stopping collection actions while the case proceeds through the court system.

Bankruptcy law allows people who file for Chapter 13 protection to maintain ownership of all their property while working to repay the debt they have accumulated. The court must approve a payment plan submitted by the person making the filing. The terms for these plans are often three to five years. Individuals who do not demonstrate the ability to make regular payments may not be eligible for Chapter 13 bankruptcy protection.

A trustee appointed by the court is responsible for seeing that payments are made as promised. The individual who files for bankruptcy hands the money over to the trustee each month, and he or she ensures the completion of the payment process.

Debt like child support will take precedence over other obligations. The repayment plan also stipulates that all money after the basic living needs of the individual must go to paying for unsecured debt, like credit cards. These are debts that have no collateral backing them. Payments are also necessary for debts that are secured by collateral, like loans for automobiles and mortgages.

An important point to understand is that there is no requirement to pay an unsecured debt in full, if at all. The law only states that all disposable income must go toward paying this debt.

Once the repayment terms are satisfied, it is possible to have the remaining debt discharged. Once a debt is discharged, no further payments are necessary. However, before individuals can receive a discharge, they must be current on both alimony and child support.

The list of debts that are not eligible for discharge include mortgages, government benefit overpayments, student loans, and some liabilities from taxes and court judgments.

Individuals considering bankruptcy should know this is not a sign of failure, nor is it evidence that he or she is a bad person. In some cases, it is the best option for a person in need of a fresh financial start. People who feel who have questions regarding unmanageable debt may find the answers they seek by speaking to an attorney who is knowledgeable about bankruptcy law.