Chapter 13 bankruptcy is a process that's commonly used by individuals to restructure their debts. This means they typically hold onto their assets, but their creditors will likely take a reduced amount of what's owed. For example, you might ask the court to impose a 20% cut on your creditors. The net effect would be that you'd enter into a payment plan that would honor 80% of the original debts, and then the judge would discharge the remaining 20% once the plan was completed.
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