How is My Chapter 13 Plan Calculated?

  You may be wondering who decides how much you will pay in your Chapter 13 case and what factors are used in calculating your plan.

  As the petitioner of your Chapter 13 case, you - and your attorney - propose a Chapter 13 repayment plan as part of your case filing.  Under the 2005 changes to the bankruptcy law, Chapter 13 has become a much more complex process that requires multiple calculations, extensive document production and a thorough knowledge of both the bankruptcy law and the local customs and procedures of the Nashville bankruptcy courts.

  The attorneys at Clark and Washington have a great deal of experience in drafting workable Chapter 13 plans.  Clark and Washington’s only area of practice is consumer bankruptcy law and every month in our Atlanta office we draft hundreds of Chapter 13 plans, work with creditors and the Chapter 13 trustee to resolve objections and answer questions from clients about the Chapter 13 process.

  As your attorneys, our goal is to represent you zealously and to present and obtain court approval of a plan that reflects a workable budget that will give you the best opportunity to survive Chapter 13 for up to five years.  We know that unexpected expenses arise.

Factors Used in Your Chapter 13 Plan Calculation

  Your expected monthly household income is one of the main factors that we look at when calculating a plan.  In fact, the bankruptcy laws require us to plug in your gross income numbers into a series of calculations that make up a “means test.”  Twice a year, the United States Trustee releases new figures that reflect the “median income” of families in Georgia.  We use different formulas to develop a Chapter 13 plan depending on whether your family income is above or below this median income figure.  The means test also includes a schedule of allowable deductions and the resulting calculations give us a starting point for determining your Chapter 13 plan payment.

  We also have to look at your schedule of assets.  Once we know what you own, we can figure out which assets may be sheltered (exempted) and which ones are non-exempt.  The bankruptcy law requires that your unsecured creditors are to receive at least as much as they would get if your non-exempt assets were sold at auction, so we have to keep these figures in mind when drafting your plan.

  Although Chapter 13 plan calculation may seem almost mathematical, in reality, there is an art to creating a reasonable and feasible Chapter 13 plan.  This knowledge comes only with experience and Clark and Washington is pleased to offer our experience and substantive knowledge to you.