To calculate your monthly payments for your Chapter 13 bankruptcy repayment plan, the U.S. Chapter 13 bankruptcy Trustee uses a few different methods to determine an appropriate amount you can afford, manage, and cover your required costs.
The amount of your monthly payments under the plan depends on factors such as where you live, your income and expenses, if you own exempt property, and the type of debt you have.
You Chapter 13 repayment plan must be enough to cover the following expenses each month plus the amount you’ll end up paying to your creditors:
Administrative fees will be paid 100%. These include:
•Chapter 13 filing fee ($281)
•the trustee's commission (3% to 10% of each monthly payment)
Priority debts will be paid 100%. These include:
•back alimony and child support
•most tax debt
•wages and salaries
If you want to keep your house, mortgage defaults will be paid 100%
through the Chapter 13 repayment plan.
If you want to keep other property, such as a car, those secured debt defaults will be paid 100%.
Unsecured debts (such as credit cards, medical bills, payday loans) will be paid anywhere from 0% to 100% of what you owe. The exact amount depends on:
•the total value of your nonexempt property
•the amount of disposable income you have each month
•how long your plan lasts
The length of your Chapter 13 bankruptcy repayment plan depends on your income and disposable income level. If your income is more than the median monthly income for a household of your size in Ohio, your plan must last five years. If it’s less, you may propose a three year plan.
Calculating a Chapter 13 repayment plan is complicated and very different for each bankruptcy case. The more organized with financial records, income statements, and assets, the easier it will be to estimate an appropriate monthly payment. The U.S. Chapter 13 Trustee will ultimately approve your Chapter 13 repayment plan. Paolucci Bankruptcy Law will work diligently to get you the best repayment plan for your financial situation.