Minimum Payment Requirement in Chapter 13 Bankruptcy
There is a minimum payment requirement in Chapter 13 bankruptcy but it will vary from district to district and depend on several factors.
- The amount of debt that you must pay in the Chapter 13 bankruptcy repayment term is one factor. There will be certain types of debts that you must pay when you're in Chapter 13 bankruptcy. For example, most tax debts and domestic support payments such as child support and alimony cannot be discharged in bankruptcy and therefore must be repaid when filing Chapter 13 bankruptcy. Also, if you want to keep your car or house, you must repay the debt in the Chapter 13 bankruptcy repayment plan. It is these secured and priority debts which will make up your minimum payment requirement in Chapter 13 bankruptcy.
- The length of your Chapter 13 bankruptcy repayment term is the second factor. Will you be repaying your debts for no more than 36 months, 60 months or some period of time in between?
Let's take a look at a possible scenario so you can get a better idea of how minimum payments work in Chapter 13 bankruptcy. Let's say you have a tax debt of $20,000 and an outstanding vehicle loan for $30,000 and your minimum term for Chapter 13 bankruptcy is 36 months with the option to extend to 60 months. To determine your minimum monthly payment in Chapter 13 bankruptcy, you would need to add the balance of those loans plus interest to the loans over the period of 36 months and then over 60 months. Then you will need to take the balance you come up with and add it to the bankruptcy trustee administration fee. Divide the total by 36 months and then 60 months to find out what your minimum payment would be per month.
Have Any More Questions About Chapter 13 Bankruptcy?
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