Chapter 13 bankruptcy is an option if you make too much money to go through a Chapter 7 bankruptcy. This form of bankruptcy allows you to make installment payments over the course of three to five years. During that time, a trustee takes the single payment and pays creditors. At the end of the term, any remaining debts are discharged.
A couple of the benefits of Chapter 13 bankruptcy are that it's fairly inexpensive and gives you an opportunity to pay back some, but not all, of the debts you've accrued. Instead of being weighed down by all the debts you have, the court allows them to be settled for less. Additionally, you'll make only one payment a month, which is much easier than multiple payments would be.
Why is Chapter 13 bankruptcy better than Chapter 7?
It isn't necessarily better, but it is different. In Chapter 7 bankruptcy, you're likely to lose some possessions, even if you have exemptions. In Chapter 13 bankruptcy, that's not a concern. You'll be able to make your single payment each month and then move on. You keep your assets during the bankruptcy since the trustee is still making your payments for you.
In either bankruptcy, your debts are discharged after you emerge from bankruptcy. This starts you on a healthier financial path in the future.
No two people are in the same financial position, so it's a good idea to look into your options before choosing bankruptcy. There are other methods of getting ahead on your debts, but if bankruptcy seems right for you, then it's a good idea to get started.