I Plead the Thirteenth..

Bankruptcy under Chapter 13 is the adjustment of debts for an individual with regular income. In Chapter 13, the Debtor proposes a plan to address his debt. The Debtor will ultimately seek confirmation of his plan from the Bankruptcy Court. When a plan is confirmed, all of the Debtor’s debts are handled under the terms of the confirmed plan. Upon completion of the plan, the Debtor receives a Discharge. Discharge is the release of the Debtor from Bankruptcy, and the elimination of debt, with limited exceptions.

Bankruptcy Chapter 13

How Much Do I Owe?

How much a Debtor pays into a Chapter 13 plan is largely based on the Debtor’s ability to pay. The Debtor’s ability to pay is called disposable income. The Debtor’s disposable income is calculated by subtracting his allowable expenses from the income. Generally, the Debtor’s income will be calculated based on the average of the six month period prior to the Bankruptcy filing date. And the Debtor’s expenses are those that are actually expended and tested for reasonableness.

How Much Can You Pay?

When the case is filed, a Chapter 13 Bankruptcy Trustee will be appointed. The Trustee’s primary duty is to review the Debtor’s case and determine whether the Debtor is paying all of his disposable income into the plan. Generally, any disputes about the amount of the plan payment are worked out between the Debtor and the Trustee. However, disputes that cannot be worked out, are decided by the Bankruptcy Judge.

In Conclusion…

Therefore, Bankruptcy under Chapter 13 does not mean full repayment of all of the debts. In fact, many debtors have eliminated substantial amounts of debt with Chapter 13 Bankruptcy Plans that pay very little or nothing to unsecured, non-priority debt. In order to have a successful Chapter 13 Bankruptcy Plan, it is important to have accurate calculations of income and expenses. Having an experienced Bankruptcy Attorney to make sure that you have taken advantage of all allowed expenses will make a difference on whether your plan succeeds or fails.

If you are considering filing a Bankruptcy under Chapter 13 or 7, please contact the Okano Injury Law.

Law Offices of Rodney K. Okano
6069 S Fort Apache Rd #100,
Las Vegas, NV 89148, USA
+1 702-566-3600