In a chapter 13 bankruptcy case, the debtor (the legal term for a person who files for bankruptcy) pays all of their disposable income, each month, towards their debts in a three to five year repayment plan.

Filing a Chapter 13 bankruptcy is a helpful tool to deal with overwhelming debt. A Chapter 13 bankruptcy allows a debtor to pay as much as they can afford in a three to five year repayment plan. After three to five years, a debtor will receive a bankruptcy discharge of their remaining debts. How much a debtor pays each month, is impacted by their monthly expenses and the deductions from their paystubs. A debtor must pay all of their disposable income each month as a payment to their creditors in a Chapter 13 bankruptcy. A debtor’s disposable income is calculated by taking their gross income and subtracting their deductions, including taxes, and all of their other monthly expenses. Disposable income is the amount that remains.