Not every person in New Hampshire who wants to file for bankruptcy will qualify for Chapter 7 “liquidation” bankruptcy, particularly if they do not pass the Chapter 7 means test because their income is too high. However, filing for Chapter 13 bankruptcy may be an option for these debtors that allows them to keep their property while still paying off their debts. To do so, a repayment plan will be created and approved by the court. And, the repayment plan starts with the debtor.

In a Chapter 13 bankruptcy, the debtor must attend credit counseling. Through these counseling sessions, the debtor will develop a repayment plan with the assistance of their counselor that is workable given the debtor’s current amount of disposal income.

Once the repayment plan is created, it must be accepted by the court. In addition, the debtor’s creditors have the right to object to the repayment plan. If for some reason the repayment plan is not acceptable, the debtor is required to make the necessary changes to make the plan acceptable.

After the repayment plan has been accepted by the court, the debtor will make periodic payments to a trustee. It is the trustee’s duty to distribute these funds to the debtor’s creditors. In this way, the debtor will not have direct contact with their creditors during the three to five-year repayment plan.

So, while the formation of a repayment plan may seem formidable, the details of the plan start with the debtor’s preferences. Financial counselors, attorneys and other professionals are great resources for debtors wishing to file for Chapter 13 bankruptcy. Once the repayment plan is completed, many of the debtor’s remaining liabilities will be discharged, allowing the debtor to move forward on fresh financial footing.