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Chapter 13 bankruptcy differs from Chapter 7 bankruptcy in that debtors are allowed to keep their property during the repayment process which can run anywhere from 3 to 5 years. In a Chapter 7 bankruptcy, debtors discharge their debts in exchange for the sale of their non-exempt property. Both Chapter 13 and Chapter 7 bankruptcies give individuals a fresh financial start. However, there are certain steps in the Chapter 13 process that many individuals are not aware of.

Before filing a Chapter 13 bankruptcy petition, debtors are required to attend a credit counseling program. The credit counseling program is offered in a wide variety of mediums, including online. This program may not seem difficult to most individuals. However, it is designed to educate consumers on debt management and to prevent them from falling victim to the same type of financial struggle.

After the credit counseling program is finished, debtors are required to pay a fee before filing the necessary paperwork. The debtors are required to give the court information about debt expenses, income, secure and unsecured debt and credit holdings. After this information is received by the court, a trustee is designated to the case. It is the responsibility of the bankruptcy trustee to review the case. If necessary, they will request additional information and communicate with the debtor and creditors regarding the petition.

Once all of the information is received, the trustee will hold a creditors meeting. During this meeting, the trustee, creditors and potentially the debtor will discuss a repayment plan. It is the debtor’s responsibility to file an adequate repayment plan with the bankruptcy court. The bankruptcy court will either approve or reject the proposed payment plan. If the plan is approved, the Chapter 13 bankruptcy is complete. If the repayment plan is rejected, the debtors may rework the repayment plan to suit the request of the court.

There are many necessary steps and elements that must be taken and present in order for individuals to file a Chapter 13 bankruptcy. For individuals considering Chapter 13 bankruptcy, speaking to an experienced bankruptcy attorney may help them stay on task and complete the process as easy as possible.