How Is The Payment Calculated In A Chapter 13 Bankruptcy Case?

As you are gathering up your documents and working with your bankruptcy lawyer on a Chapter 13 plan, you will probably be wondering how much of your paychecks you will have to pay for the payment on the plan each month. This is a good question to ask your lawyer, and the answer to this will be different for each case. Here are the factors your lawyer will use in determining the payment amount he or she presents to the court for your Chapter 13 case. 

Your debts

The debts you have play a huge role in the amount you will pay for this payment to the court in a Chapter 13 case, and your lawyer will evaluate your debts by category. The first category of debt is called priority debts, and these refer to debts you have to pay back in full through your plan. Your mortgage debt is an example of a priority debt, and other ones include child support, loan payments for secured debts, and student loan debts.

The other category is considered non-priority debts, and while these debts are not unimportant, courts do not view them as important as priority debts. Credit card bills and other types of unsecured debts fall into this category. In your case, you may or may not have to pay these debts off in full.

Your income

Your lawyer will then compare the priority debts you have to your income amount. By doing this, your lawyer can see how much money you can use from your income to pay off the priority debts. If you have a large amount of income and can pay off other debts, this will also affect your payment amount.

The amount of your disposable income also matters

The other factor that lawyers consider is your disposable income. You will need to have money left from your income after making your Chapter 13 plan payment each month. You will need this money to pay your utility bills and to buy groceries, gas, and other basic things. Lawyers and courts use these factors to determine a payment amount, and there may be additional factors used as well.

As mentioned, every case is very different due to the unique circumstances of everyone who files for Chapter 13. The only way you can find out the actual payment amount would be to meet with a lawyer and start working on your case. Look for a lawyer in a bankruptcy law firm for more information.