How Much is Your Plan Payment in a Chapter 13 Bankruptcy?

01 Dec How Much is Your Plan Payment in a Chapter 13 Bankruptcy?

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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Douglas Jacobs is a California bankruptcy attorney and partner in the Chico law firm of Jacobs, Anderson, Potter & Chaplin. Since 1988, Mr. Jacobs has taught Constitutional law and Debtor-Creditor/Bankruptcy law at the Cal Northern School of Law. He has served as Dean of Students since 1994. He is a frequent lecturer on the subject of consumer bankruptcy law, and has spoken at both state and national levels.
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