Although you could roughly guess what Chapter 13 bankruptcy payments may be, it is best to discuss this with a competent Iowa bankruptcy lawyer to get it right.
In a nutshell, Chapter 13 bankruptcy payments are figured out in such a way as to allow normal family and household expenses. While it might sound fairly straightforward it is not always that way, which is why it is best to work with an Iowa bankruptcy lawyer.
Chapter 13 repayments are not just based on a math calculation. Instead, they are based on what is a reasonable assumption of what you are able to pay back to your creditors and still keep up with your normal household and family expenses.
Your Chapter 13 repayment plan is typically submitted with your petition to the U.S. Bankruptcy Court, and it is put together by you and your Iowa bankruptcy lawyer. By and large, it is drafted with an eye on various factors such as your income and the existing means test in your state. The means test is the figure that measures your income against the average income for your state.
Assets you have in your possession are also a part of the calculations. Once the lawyer has worked with you to figure out what you own, he is able to determine which assets are exempt and which are not. Put another way, bankruptcy law says unsecured creditors get at least as much as they would if your non-exempt assets were sold.
To roughly calculate what you would be paying, you use your monthly net earnings as a starting point, which is your after tax income, less deductions for things like pensions or health insurance. These are balanced against your living expenses (mortgage, rent, car payments, insurance, utilities, clothing, food) and other costs associated with daily living.
What many people do not realize is that credit card payments, and other unsecured debts are not rolled into the calculation largely because they get paid, in part or fully, once the bankruptcy repayment plan is in place. Late fees and interest on overdue accounts is often waived in Chapter 13 plans. However, in order to find out what you will and will not be paying, the details need to be worked out with an experienced Iowa bankruptcy lawyer.
Kevin Ahrenholz is an Iowa bankruptcy lawyer and Iowa bankruptcy attorney. To contact him, visit http://www.iowachapter7.com or call 1.877.888.1766.
