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What should a debtor do if he or she wishes to keep property?

Generally speaking, a debtor who has income and who wishes to protect his or her property from creditors should file for Chapter 13 bankruptcy rather than for Chapter 7 bankruptcy. Chapter 13 uses the debtor’s income to pay back creditors over a period of three to five years, while Chapter 7 liquidates the debtor’s assets and distributes the proceeds amongst the creditors. However, if a Chapter 13 debtor does not have enough income to pay back the amount of debt that the court deems necessary, the court may use some of the debtor’s nonexempt property to pay creditors.