In Chapter 13, you have to make monthly payments according to a payment plan to pay off your debts. But many above median debtors worry about whether they can keep up to the payment plan because even though their level of income exceeds the average income set by their state, they do not have much disposable income to pay off debts (which is why they file for bankruptcy in the first place).
So if you are in such a situation where your financial ability on paper does not match the actual reality of your circumstances, I’ve got good news. In the past, as a “above median income” debtor filing for Chapter 13 bankruptcy you would have been required to either pay your debts in full or to partially/fully repay creditors over the course of 60 months, even if your do not have any disposable income.
But nowadays, bankruptcy courts have started to consider your “real” income and expenses when the judge sets the amount you need to pay each month under a Chapter 13 bankruptcy plan. In other words, the bankruptcy court will consider your real ability to pay when determining the amount of the repayment plan over the course of 60 months.
This means even if your income is higher than the average income set by your state, filing Chapter 13 bankruptcy to rid yourself of your debts is a good option. If you are considering filing for bankruptcy, call us at (813) 200 4133 for a free consultation.
