If your income is higher than the median income for your household size and you are struggling financially, a Chapter 13 bankruptcy may be the solution to your troubles. In a Chapter 13, you are required to pay your creditors at least a portion of what they are owed. Most people want to know how much they will have to pay if they file a Chapter 13 case. To determine the amount, several steps must be followed.
Your bankruptcy lawyer will use the means test (Form B22C) to determine whether you are above or below the median income for your household size. The median income is set by the U.S. Census Department. If you fall below the median income, your Chapter 13 repayment plan will be for a term of 36 months. Your monthly payment will be the amount of your “disposable income,” which is the amount left over after you pay your “reasonable and necessary expenses.”
If your income exceeds the median income for your household, your Chapter 13 attorney will use the IRS standards in determining the amount of your monthly plan payment. The IRS standards allow deductions for certain expenses such as rent/mortgage, food, clothing, medical costs and similar necessary expenses. An experienced lawyer can help ensure that you take advantage of all the deductions applicable in your individual situation. Once the deductions have been made from your gross monthly income, the remaining amount is your projected disposable income which will be paid to the trustee to fund your plan.
The Chapter 13 process can be confusing. However, with the advice and guidance of the legal team at DeLadurantey Law Office, LLC, you will be able to proceed with confidence. We thoroughly explain all of your options and we help you each step of the way. Call us today to schedule an appointment.
For your bankruptcy, foreclosure, and debtor’s rights matters, contact DeLadurantey Law Office, LLC at (414) 377-0518. We serve the counties of Milwaukee, Waukesha, Kenosha, and Racine, including such areas as Milwaukee, Merton, Delafield City, Waukesha City, and Kenosha. Visit our web site and like us on Facebook.