One of the components of a Chapter 13 bankruptcy is that you are going to have to make regularly occurring payments to the bankruptcy trustee. These go toward repaying the creditors who are included in your filing. Typically, you are going to make payments for 36 to 60 months.
The method for determining what your payments will be is rather complex. The court doesn’t just add up your debts and divide those by the number of months in your plan. Instead, various factors come together to determine what you are going to pay each month.
In order to file a Chapter 13 bankruptcy, you must have an income. This is one of the factors that is considered. The court then looks at specific expenses. Your rent or mortgage is factored in at the actual amount. Utilities aren’t handled this way. The Internal Revenue Service publishes charts that dictate how much you can claim for utility payments.
Once the necessary and reasonable expenses that you have are added up, they are subtracted from your income. The amount that is left is likely going to become your payment to the court. There is a chance that other factors might come into the picture, but this is why each case is handled individually.
Some people have income that isn’t consistent. Freelancers and seasonal workers are two examples. These filers might have a flexible payment plan that takes these changes into account. When you file for bankruptcy, you must provide six months of income proof to the court. This can help them determine what you are going to be able to pay.