How Much Will My Monthly Payment Be in a Chapter 13?
The amount of your Chapter 13 Plan monthly payment is based on several factors. An experienced bankruptcy attorney will work with you to ensure that each factor is considered when determining the amount of your plan payment.
Main Factors to Consider
· Disposable Income
· Liquidation Analysis
· Secured and Priority Debts
· Monthly Net Household Income – Monthly Customary/Ordinary Expenses = Disposable Income
Household income includes income from you and your spouse even if spouse is not filing.
Household income includes child support and regular payments you receive from a roommate or any other source.
All of your disposable income has to be turned over to the Trustee unless you are in a 100% plan.
· Your creditors must receive at least as much as they would have received in a Chapter 7.
Bankruptcy allows individuals to claim exemptions for some property. In a Chapter 7 any unexempt property could be sold and the funds turned over to creditors.
In a Chapter 13 your creditors must receive at least as much as they would if your unexempt property were sold.
§ House with market value of $235,000.00; mortgage of $215,000.00; exemption of $25,000.00 = (235 – 215 – 25 = -5) fully exempt (no minimum required)
§ House with market value of $235,000.00; mortgage of $200,000.00; exemption of $25,000.00 = (235 – 200 – 25 = 10) $10,000.00 unexempt (must pay at least $10,000.00 into Chapter 13 plan or be in a 100% plan)
§ House with market value of $235,000.00; mortgage of $150,000.00; exemption of $25,000.00 = (235-150-25= 60) $60,0000 unexempt (must pay at least $60,000.00 into Chapter 13 plan or be in a 100% plan)
Secured and Priority Debts
Secured and Priority Debts must be paid in full in a Chapter 13 bankruptcy.
Secured Debts are those debts with liens attached (home, car, collateral for a loan).
Priority Debts are debts that bankruptcy law requires to be paid early in the process (taxes, child support, bankruptcy attorney fees)