Repayment of Debts

• Chapter 13 bankruptcy is substantially different from Chapter 7 bankruptcy, which essentially clears the debtor of all debts owed, except certain debts which are exempt from bankruptcy relief, such as federal student loans and back taxes. People filing for Chapter 13 bankruptcy must submit and agree to a payment plan to repay a portion, and in some cases, all of their debt. Federal bankruptcy law requires that the amount agreed upon in the repayment plan must be repaid in either a three-year or a five-year period.
  
  

Debts Exempt From Chapter 13 Bankruptcy

• While most debts will be discharged from the payment plan arranged during a Chapter 13 bankruptcy proceeding, there are several types of debt that cannot be discharged. Not included in bankruptcy are child support and alimony obligations, fines and penalties accrued during a criminal case, federal student loans and back taxes owed to the Internal Revenue Service and other state tax agencies.
  
  

Court Costs and Fees

• Bankruptcy proceedings can be a costly ordeal. While the largest portion of the cost of a Chapter 13 bankruptcy proceeding is the cost to obtain legal counsel, the district bankruptcy court in the debtor's state also charges to file for Chapter 13 bankruptcy. The court will charge filers a total of $274, consisting of a $235 case filing fee and a $39 administrative fee. While the court costs and administrative fee are generally required to be paid in full at the time of filing for Chapter 13 bankruptcy, the court may grant the debtor, if requested, the opportunity to pay the money in installments.
  
  

Meeting of Creditors

• Federal bankruptcy law requires that the bankruptcy trustee assigned to the debtor's proceedings conduct a meeting of creditors. This meeting is held to give creditors an opportunity to conduct an inquiry into the debtor's financial situation. The meeting must be held not later than 60 days after the debtor has filed for Chapter 13 bankruptcy protection. Federal bankruptcy law requires that the meeting of creditors be held in a location not affiliated with the federal bankruptcy court and bars the federal bankruptcy judge presiding over the case from attending the meeting.
  
  

Chapter 13 Bankruptcy Discharge

• The act of having one's debts legally relieved is called a "discharge." Discharging one's debts through Chapter 13 bankruptcy is achieved after all payments have been made according to the payment plan agreed upon by all parties involved in the bankruptcy proceedings. In addition to the traditional discharge through Chapter 13 bankruptcy, debtors that have fallen upon hard times may ask the court to discharge their debts through a hardship discharge. Hardship discharges are generally granted only upon proof that the hardship could not have been avoided and that the creditors received approximately the amount that would have been received during a Chapter 7 bankruptcy proceeding.