What is the average Chapter 13 bankruptcy repayment plan?

Chapter 13 is a different option than chapter 7, because your debts aren't just discharged in the bankruptcy filing. Instead, you must enter into a bankruptcy repayment plan wherein you repay a portion of your debts. Chapter 13 has become a more common form of personal bankruptcy due to the fact that many people no longer qualify for chapter 7 based on the income guidelines set by the changes to the bankruptcy code that took place in 2005. 

The repayment plan is not going to be a generic "normal" repayment plan, since it will be based on your income and on the amount of debt that you have. As a general matter, in determining how much you will pay on a monthly basis as part of your bankruptcy repayment plan, you should consider:

• Your income
• Your obligations
• How much disposable income you have left over

For example, if you make $2000 a month, and have $1000 a month in fixed costs for things like rent, insurance, car insurance and other such required expenses, then you will have $1000 a month in disposable income. The amount of disposable income that will go towards your debt repayment is usually calculated on a percentage basis. For example, you may have to pay 25 percent of your disposable income each month to your creditors in order to repay the debt that you have. The money is generally paid out to you by a bankruptcy trustee, who will then distribute it to the creditors appropriately based on the repayment plan that you set. Any repayment plan that is set will need to be approved by both the court and by the creditors involved.

To get help setting up a bankruptcy repayment plan that is appropriate for you, you should strongly consider speaking with an experienced bankruptcy lawyer.