How are  Chapter 13 Bankruptcy Payments Calculated?

Beginning the Chapter 13 bankruptcy process often results in people experiencing many emotions concerning fear about what lies ahead. One of the best ways to reduce the negative feelings that you feel about the bankruptcy process is to learn as much as you can about it ahead of time. The following answers one of the most common questions that people ask about the bankruptcy process, which is how courts determine repayment plans for Chapter 13 bankruptcy.
The Importance of Repayment Lengths
Repayment lengths play an important role in deciding the duration of Chapter 13 payment plans. The length of time that a person will be required to repay remaining debts will range from three to five years. A person’s monthly income will often influence the monthly amount that the person will be required to pay. 
Income is often compared to the median income in Florida, which is currently in the range of $52,000. If your income (or you and your spouse’s income, if you filed jointly) is below the median income, you will likely be required to repay your debts under a three-year repayment plan. If you earn more than the median income, you will likely be required to pay into a five-year plan. Provided that a court approves of doing so, it is possible to later alter the terms of your repayment plan.
Debt Types Can Influence Monthly Chapter 13 Repayment Amounts
One of the details that many people overlook is that the type of debt or debts that you owe will often influence the monthly payment amount. Consider the following issues:

  • Fees and interest, which often must be repaid and can have a substantial influence on the monthly amount that a person owes
  • Priority debts, which refer to debts that are non-dischargeable in bankruptcy and which must be repaid during the life of a repayment plan
  • Secured debts, which a person will typically be required to pay off during the life of a loan
  • Unsecured debts, which are sometimes capable of being discharged through Chapter 13 bankruptcy. Completing the means test will better help you determine if you will be required to repay this amount.

Minimum Chapter 13 Repayment Amounts
Even after you have declared Chapter 13 bankruptcy, it can still be challenging to repay debts. It can help to understand the minimum monthly amount that you will owe each month. Fortunately, often after completing the Chapter 13 means, a bankruptcy lawyer can help you determine both how long your repayment plan will last as well as the amount that you will be required to pay non-priority secured creditors.
Speak with an Experienced Bankruptcy Lawyer
At Adam Law Group, we understand that filing for Chapter 13 bankruptcy can be a frightening experience without adequate assistance. That is why we focus on providing our clients with the best service possible to make sure that they successfully navigate the various obstacles that may arise. Contact our law office today to schedule a free case evaluation.