A Chapter 13 Payment Plan Example

Everyone who is thinking about filing a Chapter 13 Bankruptcy Case always wants to know how much their Chapter 13 Plan payment will be.  Often times, if their financial situation is extremely complex, that is virtually impossible to do until their Bankruptcy Attorney finishes drafting their Petition, Schedules and Chapter 13 Plan. Nevertheless, I can give an example in a simple hypothetical Chapter 13 case: 

This example is based on a Debtor who is below median income but has sufficient income to complete their case in 48 months and has the following property and debts:

(1) A car worth $5,000.00 which is encumbered by a car loan on which they owe $9,000.00 which was incurred more than 2 and a half years ago;

(2) Residential real property worth $100,000.00 on which they owe $50,000.00 with a monthly mortgage payment of $500.00 and on which they are $2,500.00 delinquent;

(3) No non-exempt property; and

(4) $50,000.00 of unsecured, credit card debt.

In such a case, the Debtor would, over the life of their Chapter 13 Plan,  have to pay the following items through their Plan:

(1) $5,000.00 for their car plus interest at a current rate of approximately 6.5%;

(2) $500.00 per month on their regular, ongoing monthly mortgage payments;

(3) $2,5,00.00 to cure the arrearage on their mortgage;

(4) 1% of their unsecured debt which consists of the $54,000.00 made up of the unsecured portion of their car loan in the amount of $4,000.00 and $50,000 of unsecured credit card debt;

(5) The balance of their attorney fees in the amount of $3,700.00 assuming they didn't pay anything towards those fees before filing their case; and

(6) An Administrative Fee of approximately 6% to the Chapter 13 Trustee on each payment made through their Chapter 13 Plan.

Based on these facts, the Chapter 13 Plan Payment in a 48-month Chapter 13 Plan would be approximately $805.00 per month. This would include their mortgage payment, their car payment and all of their credit card debt. At the end of the Plan, the car would be paid off, their unsecured debts would be discharged and the only debt that would remain would be their mortgage on which they would be required to resume the regular monthly mortgage payment. 

If you are suffering with financial problems, please call (513) 528-0200 or send an email to Info@CincinnatiBankruptcy.com. You can also contact us with through our website by clicking here.

I look forward to helping you,

Greg Wetherall

Cincinnati Bankruptcy Lawyer

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