How Much You Will Pay In Chapter 13 Bankruptcy
Often debtors filing for Chapter 13 bankruptcy
want to know what their monthly repayment plan will cost. It's impossible for a bankruptcy attorney to give a debtor an exact dollar amount; but there are four factors that help determine how much money a Chapter 13 bankruptcy debtor will be required to pay.
- The first factor is what is called "Chapter 7 Liquidation Analysis" which hypothetically examines what would happen to your unsecured creditors if you filed for Chapter 7 bankruptcy . If money would be leftover to pay the unsecured creditors in a Chapter 7 bankruptcy then at least that amount would be added to your Chapter 13 bankruptcy repayment plan.
- The "Means Test" is used to determine your current monthly income, which uses the past six months of income to come up with the calculation.
- The "Disposable Income Test" subtracts your regular monthly expenses from your monthly income. Expenses do not include things such as credit card payments, student loans or any other payments to unsecured creditors. This amount is your disposable income. The bankruptcy court may require you to use all of this disposable income amount to repay creditors in Chapter 13 bankruptcy.
- "Required Payments To Priority And Secured Creditors" are payments that you must pay in full and first in Chapter 13 bankruptcy. These payments could include child support, taxes, student loans etc.
Speak to a bankruptcy attorney to determine how you can best protect your assets in a Chapter 13 bankruptcy.