How much of my debt will I have to repay in Chapter 13?
The amount of debt you must repay in Chapter 13 depends on the type of debt, the value of your assets, and your income. Many factors come into play when determining the overall plan payment, but here are some guidelines:
Bankruptcy Costs: You must pay 100% of legal fees, court filing fees, and a 10% fee on all plan payments to the Trustee.
Priority Debts: You must pay 100% of priority debts, which generally include taxes, child support and alimony. Some taxes are dis-chargeable, but recent tax obligations must be paid in full.
Secured Debts: You must pay the value of the property that you retain. If you want to keep your home or your car, you must pay the full amount that you owe on the loan. Loans secured by investment properties can be reduced to the value of the property.
Unsecured Debts: This is a complex calculation that takes into account your projected disposable income (the net amount of money that you have left over after paying allowed expenses) as well as the value of the assets that you seek to retain. You must pay out, at a minimum, the liquidation value of your assets. You must also pay, at a minimum, your projected disposable income for a period of three to five years. This could result in a payment of anywhere from 0% to 100% of what you owe. The determining factor is not the amount of your debt, but the value of your assets and your income.