How Much Does Chapter 13 Cost?
In the Western District of North Carolina, the court sets the attorney base-fee at $4,500.00. However, you do not owe all of those funds prior to filing. You and your bankruptcy attorney will agree upon an amount you will pay prior to filing; the remainder will be built into your Chapter 13 plan, and paid over the course of your Chapter 13 case. There are also court filing fees, but again, those can typically be paid over time as part of your Chapter 13 plan payment.
What Determines My Chapter 13 Plan Payment?
Your Chapter 13 plan payment is a combination of both your ability to pay, and a comparison to what your creditors would receive if your assets were liquidated in a Chapter 7 bankruptcy filing. Additionally, if you have mortgage arrears (missed payments) or vehicle lender arrears, those will need to be paid over time in your Chapter 13.
Ability To Pay In Chapter 13
Your ability to pay is simply a look at your ongoing monthly income and expenses. Your bankruptcy attorney will propose a payment to the court. This proposed payment will be examined. Essentially, any leftover funds each month after your ongoing household expenses are paid, should be your minimum monthly Chapter 13 payment.
Arrears And Other Priority Debt
If you have mortgage arrears, as mentioned above, those will need to be built into your Chapter 13 plan payment. Additionally, if you have IRS or state tax debt which is less than three years old, that will need to be re-paid in the plan. Your attorney will calculate your payment on these items, in addition to a small percentage to be paid to your unsecured creditors. These calculations will be compared to your budget, or your “Ability to pay” as discussed above. If your budget supports the proposed monthly payment, your plan should be approved by the court.
Length Of Your Chapter 13 Plan
Most Chapter 13 plans are five years or 60 months. If you want to propose a shorter plan, you will typically be required to pay the same amount but over the shorter period of time. In many cases, if you propose a plan shorter than five years, it must be a 100% plan. This means that your plan proposes to pay your unsecured creditors 100% over the course of the Plan. A typical five year plan will pay somewhere between 1% and 15% to the unsecured creditors, depending upon the factors mentioned in this article.
Speak With A Bankruptcy Attorney Today
The easiest way to get a better idea of what your Chapter 13 plan payment would be is to speak with a Charlotte bankruptcy attorney today. You can call us at 704.749.7747 or click for a FREE CASE EVALUATION. After a brief discussion with an attorney, and after submitting some documentation, we will be able to estimate a Chapter 13 plan payment for you. We can also confirm if a Chapter 7 or a Chapter 13 is the best choice for you.