Chapter 13 bankruptcy is quickly becoming one of the most utilized forms of debt relief in Texas. When filing for Chapter 13 bankruptcy protection, your debts are categorized into priority and nonpriority debts, as well as, secured and unsecured. All priority debts such as family support payments and certain taxes must be paid back. Additionally, any mortgage arrears and secured debts for a property you wish to keep must also be paid back. A Texas Chapter 13 bankruptcy allows for a debtor to pay back these debts over a period of 36 to 60 months.
What will my Chapter 13 monthly payment be?
When calculating your monthly Chapter 13 payment, all secured interest arrears must be included, as well as, alimony, child support, and specific types of taxes. Administrative fees and interest charges will also be added, and depending on where you live, you could expect to pay as much as 10% for Bankruptcy Trustee fees and interest payments. While the court may require you to pay back the entire loan balance on secured interest loans, you can generally expect to at least make regular payments on the property you wish to keep. Once you have an account of all the debts you must pay off during your Chapter 13 repayment plan, this is subtracted from your disposable income which is calculated using the previous six months income directly before filing bankruptcy. This information is then compared to the median income for households in Texas and a determination can then be made regarding how much your disposable income will be required to pay back your debts.
Disposable Income in Chapter 13 Repayment
When you file for Chapter 13 bankruptcy, you will fill out a form known as the “Chapter 13 Statement of Current Monthly Income and Calculation of Commitment Period and Disposable Income”. This form will be utilized to discover how long your repayment plan will last and how much unsecured debt will be paid back with your disposable income. Disposable income is considered the money that is left over once you have paid all your necessary living expenses. In Chapter 13 bankruptcy, ALL of your disposable income must be used toward paying your creditors back.
Contact Your Dallas Bankruptcy Attorney
The main benefit of Chapter 13 bankruptcy is the discharge of “left-over” nonpriority unsecured debt that remains after making all your monthly payments on time to the bankruptcy trustee. When calculating your information for a Chapter 13 means test, things can quickly become complicated. Enlisting the aid of a Dallas TX Bankruptcy attorney will not only help you ensure that all forms are 100% accurate and complete, but may be able to point out exemptions that will allow you to keep more property and pay back less unsecured debt.