Chapter 13 Bankruptcy is a common and effective means of filing for bankruptcy for individuals — as opposed to businesses. I like to say that it is in many ways a form of debt consolidation. It is known as an “individual reorganization,” and for good reason, because it allows you to reorganize your finances, consolidate your debt and then pay back some of it over time.
There are actually several types of bankruptcies, each with their pluses and minuses. Individual consumers are primarily eligible to file for Chapter 7 or Chapter 13 bankruptcy, and occasionally for Chapter 11 bankruptcy. There is also another option called Chapter 12 bankruptcy, but it is rare in Los Angeles. It’s appropriate for farmers and fishermen.