The Stuff You Want to Pay Gets Put at the Top
Video Transcribed: Hello, this is Edward Kelley I am a Bankruptcy Attorney Tulsa, I’m going to talk about determining your chapter 13 payment. So we’ve talked a little bit about thirteens, as you probably recall. As opposed to a seven, which is a liquidation cut and run, in a 13, you pay what you can, not what you owe for a period of three years to five years and monthly. So 36 to 60 monthly payments. And again, it’s based on your income.
So if you made too much to do a seven, you can roughly compute however much you were over is how much your payment will be. So for example, let’s say the cutoff to do a seven was $50,000 a year gross, but you make, let’s make it a nice round number, $110,000. So that’s $60,000 over the limit. So if you do a five-year plan or 60 months, your payment should be about $1,000 a month.
And again, at the end of that, after you paid $60,000 in total, then any remainder would be discharged. So if you had $100,000 total debt, $40,000 would be discharged. Usually, the payments are a lot lower and what’s discharged is a lot higher.
And within that, you may prioritize, you may pay off a bunch of tax debt that you’d have to pay anyway. Those are priorities and you might pay off mortgage arrearage that you’d have to pay anyway.
The stuff you want to pay generally gets put at the top, which is good. So that’s essentially how chapter 13 payment is computed. Now, sometimes you may not make enough to pay all that arrearage back.
So you’ll have to come up with a voluntary contribution from an outside family member. So let’s say you owed $60,000 extra on your house. So you got to pay $1,000 a month, but you only have $800.
So you might be able to get someone to help you and contribute an extra $200 a month to get it to that limit. So chapter 13, although it is based on what you can pay, not what you owe. If you want to keep a house or collateral that has a certain value, you will have to meet that value within that five years.
And certain loans have to be paid in full within that time. So that can affect your payment. Sometimes it’ll have to be higher than what you want in order to achieve what you want. So that’s a quick overview of chapter 13 payment amounts.