What is the primary function of Chapter 13 Bankruptcy?

The primary function of Chapter 13 Bankruptcy is to provide a repayment plan for individuals who are struggling with their debts but wish to reorganize their financial situation rather than liquidating assets. This type of bankruptcy is designed to allow individuals to retain their property and pay creditors over time, typically through a three to five-year repayment plan.

In Chapter 13, individuals submit a proposal to the court detailing how they plan to repay their debts. Upon approval, they make regular payments to a designated bankruptcy trustee, who then distributes the funds to creditors according to the agreed-upon plan. This process not only helps the individual manage their debts but also allows them to catch up on missed payments and avoid foreclosure on their homes.

This system supports individuals who have a regular income and would be able to meet the terms of a repayment plan, thus promoting financial rehabilitation rather than the immediate liquidation of assets found in other bankruptcy types, such as Chapter 7. Hence, "repayment plan for individuals" accurately captures the essence of Chapter 13 Bankruptcy's function.