How Much is Your Plan Payment in a Chapter 13 Bankruptcy?
By Douglas Jacobs, California Bankruptcy Attorney on Dec 1, 2007 in Bankruptcy Practice and Procedure, Chapter 13 Bankruptcy, General Bankruptcy Information
The amount of the plan payments in a Chapter 13 Bankruptcy is the key to making the plan work, catching up on your debts, and discharging those debts that you can. Although plans differ from state to state (and sometimes district to district within the state), the amount paid into the plan each month is usually based on the same calculation.
According to the law, BAPCA requires the payment of the “projected disposable income” each month. Under the law, this amount must be enough to pay all priority debts, administrative expenses, all mortgage arrearages, and a predetermined amount (which could be nothing) to the unsecured creditors.
The amount of the “projected disposable income” is generally based on how much you are bringing home minus how much it costs you to live. In most places that’s not the same as either the “current monthly income” or the amount calculated after the means test.
The actual payment, however, may also contain not only the above disposable income but the amount of your mortgage payment. This is particularly true in some districts (like the Eastern District of California) when you are behind in those payments.
Calculating the amount of the payment and how it is to be distributed through the plan is often a complex and difficult task. To do it properly you will usually need to hire a trained bankruptcy attorney.
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