How much do you have to pay back on chapter 13?

Answer 1

How Much Do You Pay in Chapter 13?

From the Nolo.com Debt & Bankruptcy Center

Learn which debts you must pay back when you file for Chapter 13 bankruptcy.

The total amount you will have to repay your creditors over the length of a Chapter 13 case depends on a number of factors, including the type of debts you owe and the philosophy of the bankruptcy judges in your area. You can get a rough idea by following these steps.

1. Add up the total value of your "nonexempt" property.Each state has laws that determine which items of property are exempt in bankruptcy, and in what amounts. For instance, many states exempt health aids, "personal effects" (things such as electric shavers, hair dryers and toothbrushes), ordinary household furniture and clothing without regard to their value.

Other kinds of property are exempt up to a limit. For example, in many states, furniture or a car is exempt to several thousands of dollars. This exemption limit means that any equity in the property above the limit isn't exempt. (Equity is the market value minus how much you still owe.)

Generally, the following items are exempt:

• motor vehicles, to about $2,000
• reasonably necessary clothing (no fur coats)
• reasonably necessary household goods and furnishings
• household appliances
• jewelry, to a few hundred dollars
• personal effects
• life insurance (cash or loan value or proceeds), to about $4,000
• part of the equity in a residence (the amount varies from state to state)
• pensions
• public benefits
• tools of a trade or profession, to a certain value, and
• unpaid but earned wages.

In a Chapter 13 case, your unsecured creditors must receive at least the value of your nonexempt property, so you will have to pay your unsecured creditors at least this amount. But this amount is the minimum, by law, that you must pay. The court will require you to pay more if:

• Any of your unsecured debts are "priority debts" -- such as back taxes or child support -- which must be repaid in full.
• If you have little nonexempt property and propose paying back only a small portion or your unsecured debts, those creditors might object to your plan. In some parts of the country, bankruptcy courts may approve Chapter 13 plans in which unsecured creditors receive nothing. In other areas, courts rarely approve Chapter 13 plans unless unsecured creditors receive 100% of what they are owed. Most courts fall somewhere in between.