Chapter 12 bankruptcy allows individuals with a regular source of income to propose a repayment plan to settle debts over 3 to 5 years rather than having them discharged immediately. However, filing under Chapter 12 comes with several disadvantages, as the individual must commit all future disposable income to the repayment plan for 3 to 5 years and their credit will be negatively impacted for 7 to 10 years.

59. PROBLEMS OF CHAPTER 12