If you are filing Chapter 13 bankruptcy, one of the requirements is to have sufficient income to make the payments per the conditions of the plan. You must have enough income to cover your living expenses and your priority payments like child support and alimony plus any secured debt like your home. Your unsecured, non-priority debt will get the value of the item and not necessarily what is due on them.
You must devote your entire disposable income towards your Chapter 13 repayment plan. Some bankruptcy courts consider disposable income as the difference between your actual income and your actual expenses. Not taking into consideration where your income falls in regards to your state’s median income.
Otherwise, you will calculate your state’s median against your income to determine the length of your plan. If you make less than your state’s median income, you will be on a three-year repayment plan. If you make more, you may be on a five-year repayment plan.
Most of the time, you will make one monthly payment to the trustee, and the court will distribute the money to your creditors. You will have to continue to make the payments yourself on your current financial obligations.
If you have questions about this or any other aspects of bankruptcy, contact a Dayton bankruptcy attorney to find out how you can get financial relief.