How Much Money You Will Be Repaying When Filing Chapter 13 Bankruptcy
When you are contemplating bankruptcy, especially chapter 13, you are surely wondering how much money you will have to pay and whom and how the payment will be calculated. Well, every chapter 13 bankruptcy is unique. Hence, it is not possible for anyone to say the exact amount that you will have to pay. However, our Pittsburgh bankruptcy lawyer will try to explain things better for you.The Calculation for Your Chapter 13 Bankruptcy Payment Plan
While calculating the payment plan for chapter 13, the amount depends on various factors including types of debts, household income, assets, and financial goals. When you are filing for Chapter 13 bankruptcy, your debts will be divided into the following categories:
- Secured debt
- Priority unsecured debt
- General unsecured debt
When you are filing for Chapter 13 bankruptcy, you will have to make payments for priority debts like a child and spousal support, tax obligation. You will also require to pay the secure debts that will include your mortgage for the house or the car loan if you want to keep the assets. Now, after these two categories are taken care of, you will have to make payment for your unsecured debts. A greater part of your disposable income will be gone with this payment. And your creditor will be receiving the amount equal to the amount they would have got from liquidation if you had filed chapter 7 bankruptcy.
The disposable income will have to be spent in order to pay the creditors. Now, after paying your priority debts and secured debts, the amount you will be left with will determine the amount. Also, the amount has to be equal to the liquidation of the assets except your exempt properties.
Our Pittsburgh bankruptcy lawyer will be able to tell you how it will work out for you.How Much Can You Afford to Pay?
Your disposable income is the amount that you will be left with after you take care of your living expenses every month. According to the repayment plan of Chapter 13, you will have to spend your disposable income first for your priority and secured debt and then the rest will be used for paying your creditors. The court will determine your disposable income with the Chapter 13 Means Test.
- While filing for Chapter 13 bankruptcy, you will have to fill out the form of Chapter 13 Statement of Your Current Monthly Income and Calculation of Commitment Period containing your income of six months prior to filing bankruptcy. The amount will be compared and calculated according to the income of a median income of others of the same size of a household as yours in your state.
- If your income is higher than the median income, then your deductions and secured payments will be considered. And the resulting monthly figure will be multiplied by 60 to determine the amount your unsecured debtors will be getting for your bankruptcy.
- In case, your income is lower than the median income, the difference between your income and expenditure, mentioned in Schedule I and Schedule J respectively, will be determining factor for what you will have to pay.
Come to Pittsburgh Bankruptcy Law Group and consult our Pittsburgh bankruptcy lawyer for further information.