How Much Will My Chapter 13 Payments Cost?

If you are planning to file for Chapter 13 bankruptcy in West Palm Beach or elsewhere in South Florida, you most likely have a question on your mind that all debtors in your position are thinking about: how much will my Chapter 13 monthly payment be? Calculating a Chapter 13 monthly payment is complicated, and there is no straightforward and streamlined system that applies to all debtors. The total amount of your monthly plan will depend upon a number of factors that are particular to your case, including the length of bankruptcy plan, the amount of your priority debts, the amount of your secured debts, the amount of your unsecured debts, and the total of your non-exempt property (or, alternately, the total of your exempt property). Our West Palm Beach bankruptcy attorneys can explain in more detail.

Length of Your Bankruptcy Plan

 For Chapter 13 bankruptcy filers, the length of their repayment plan is typically three to five years, and many debtors have the longer five-year plan. In order to calculate your monthly payment amount for your repayment plan, you will need to determine the length of your repayment plan, and a bankruptcy lawyer can help you with this.

Determining the Amount of Priority Debt 

In a Chapter 13 bankruptcy case, all priority debt must be repaid in full, so you will need to determine the amount of the priority debt you owe. These debts include debt for family support (such as child support or alimony), recent tax debt, and money owed from certain court judgments. In general, you can assume that you will pay a portion of your priority debts each month, so a part of your monthly payment will come from the total amount of this debt. If you have a three-year plan, you can divide the total by 36, or for a five-year plan, you can divide by 60, for example.

Secured Debt Amounts

 If you have debt you owe from missed payments on secured property and you want to keep it (such as your mortgage or auto loan), you will need to repay the amount of back debt owed. You can include this amount in your monthly calculation, spread out over the length of the repayment plan. In addition to repaying this debt, you will also continue to pay the regular payment on the secured property.

Exemptions Can Figure Into the Total Amount You Will Pay 

Florida’s bankruptcy exemptions will apply to your case, but not for liquidation purposes. Instead, the value of any non-exempt property will also need to be repaid as part of your repayment plan.

Additional costs to take into account include trustee fees and attorney fees.

Contact a West Palm Beach Bankruptcy Lawyer

 Going through a Chapter 13 bankruptcy process can be complicated, but an experienced West Palm Beach bankruptcy attorney at Kelley, Kaplan & Eller is here to assist you. We regularly represent clients in South Florida in Chapter 13 and other reorganization bankruptcies, and a lawyer at our firm can answer any questions you have and discuss the process for getting started on your case.

Sources:

uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-13-bankruptcy-basics

law.cornell.edu/uscode/text/11