Chapter 13 bankruptcies differ from Chapter 7

They involve a repayment of certain debts depending on the debtor’s ability to repay.  In a chapter 13 bankruptcy, the debtor’s income and expenses are analyzed using the means test and a determination regarding the debtor’s disposable monthly income is made.  Once it is concluded how much, if any, money the debtor can repay, all the appropriate schedules along with a plan are filed and submitted for the Trustee’s review.  As in Chapter 7, the Trustee will examine the case and then will determine the feasibility of the proposed plan. Once the plan is confirmed, the debtor will begin making the arranged monthly payments to the Trustee and repay over the course of 36 or 60 months  a percentage of the debt back to the creditors. Again, once the plan is filed, the Automatic Stay is created and collection attempts will typically stop.  Creditors will usually not contact the debtor during the repayment period.  Once the repayment period has finished, regardless of how much the debtor has paid, the debtors are relieved from their debt for good.  At that point debtors can go about re-establishing their credit and moving forward with their lives.