Chapter 13 is a bankruptcy law under which a petition can be filed by an individual or company. Chapter 13 dictates that the debtors repay the debt amount from their monthly earnings in installments. The court decides the time within which the decided amount has to be repaid to the creditors. Most of these will be for a maximum period of five years.

Employees and firms who have a steady income, in spite of all the debts incurred, can file a bankruptcy under this law. Since this law does not require any assets to be secured as liens, most people prefer this to the Chapter 7 law. This allows the debtor to keep a mortgaged home or car even while he