Chapter 13 Bankruptcy
The amount that you pay back in a chapter 13 per month is dictated by your income and your expenses. The trustee is going to scrutinize your budget to make sure that you are putting all of your disposable income towards the repayment of creditors in your chapter 13 case. This means that you are limited to IRS standard allowances for things like food, clothing, transportation, and other necessary expenses. There is some leeway if you can prove that you have a reason for a higher-than-expected expense for let’s say medical or housing or utilities.
Reasons To Budget
The reason why you have to budget and pay all that you can in a chapter 13 is that you are asking the creditors to accept often less than what is owed over a three to five-year period. Under the bankruptcy code, you must commit all of your disposable income. The video below talks about the types of budgeting that is allowed for food and entertainment when you’re in a chapter 13 bankruptcy case. Your trustee is going to make sure you’re not taking excessive amounts for your monthly living expenses. The higher that you are allowed to take expenses, the less there is available for month for creditors. You can find a free budget calculator at Budget Calculator.
