If the court approves your Chapter 13 filing, you will be assigned a trustee. The trustee is the person to whom you will pay the amounts agreed upon in your repayment plan submitted to the court. The trustee uses the money that you pay him to repay the creditors as specified by your plan. He also takes a portion of the money that you give him to pay himself for services rendered. If you ability to pay changes over the 3 to 5 year period. the trustee can ask the court to modify the amounts of the payments based on your new income status.

For example, if you were making $4,000 a month but, for whatever reason, see your income decrease to $3,000 a month, the trustee may ask the courts to approve a decrease in the dollar amounts that are paid to the creditors each month. Conversely, if you were to see your income increase to $6,000 a month, the trustee may ask the courts to approve an increase in the amounts of money that can be paid to the creditors. The reason that this flexibility is built into Chapter 13 bankruptcies is to ensure that the creditors are paid back as much as possible and as quickly as possible, while still letting the debtor retain solvency.

Many who choose to file Chapter 13, do so because they feel that it will protect their property from being sold. While, this is true, unlike Chapter 7, it doesn’t necessarily discount the amounts of money that you owe your creditors.

For example, if you have enough unprotected equity in your home to pay back your creditors, even though you will be able to keep your home, you must come up with a creditor repayment plan that will pay your creditors in full over the course of the bankruptcy period. However, if your unprotected equity in the home is not enough to pay off your creditors, either the full amount or a significant part of the amount that you owe will be dismissed.

Throughout the bankruptcy, your trustee is the person who you will have the majority of your contact with. He is the person you will go to with any questions or problems that pop up while you are in the bankruptcy stage. This is true even though the trustee is actually the representative of the creditors.

Because even though his primary aim is to make sure that the creditors get the monies from you that they are entitled to, he knows that the best way of doing that is to keep you, the debtor, involved in the process. If he can do this, the situation winds up as a win/win for everyone involved.

David Hoyer is a freelance writer who writes articles relating to chapter 11 bankruptcy lawyer and debt negotiators and other financial issues. Visit his site at bankruptcyfocus.com.