Probably Not. Unfortunately, a LOT goes in to determining what a debtor's Chapter 13 trustee payment would be each month if he or she filed a Chapter 13 bankruptcy so it is hard to say without doing the math.
To refresh, a Chapter 13 Bankruptcy is one in which you make a payment each month for 36 to 60 months (typically 60) to a trustee who in turn pays out your creditors according to a repayment plan that you must submit to the bankruptcy court. So, it makes sense that one question asked by every person I meet with who may need to file a Chapter 13 is, "what will my Chapter 13 payment be if I decide to file Chapter 13?" This is an excellent question, but it's not one I'll be able to answer at our first meeting. I previously wrote a blog on how your Chapter 13 repayment is determined in an Indiana Bankruptcy which you can read here. But the short answer is that there are 8 hour classes lawyers will sometimes attend dedicated to this "simple" question. There are several calculations and even then it is not a completely black and white answer. Bankruptcy attorneys must think critically and creatively to set up the most effective and advantageous Chapter 13 plan for his or her client.
With that being said, I can say that I do not recall any Chapter 13 case I have filed where the debtor's Chapter 13 monthly trustee payment was higher than any payment he or she was making to a credit counseling company prior to filing bankruptcy. The bottom line is, that it is not a lot of fun to file a Chapter 13. You aren't going to have bunches of money left over to go on vacations. You aren't going to be able to go out to dinner a lot. However, you should be able to pay your mortgage payment, car payment, buy food, buy medicine, pay for children's school expenses, buy gas and maintain you vehicles, and the other things that you need to pay for in order to live. But the tradeoff is that at the end of the repayment plan that you won't owe any more on your debt (with the exception of student loans, mortgages, other secured debts that take in excess of 60 months to pay, and any other non-dischargeable debts). In cases where my clients have had tens of thousands of dollars of unsecured debt if not one hundred thousand dollars of unsecured debt it has been a good trade-off for them.
Your bankruptcy attorney will be able to calculate what he or she expects your Chapter 13 payment will be prior to the time you file bankruptcy. Therefore, if you think the payment is too high, you don't have to file bankruptcy. The option is always yours, but I am here to give you the options. If you would like to set up a free initial bankruptcy consultation to review your situation with me at our Carmel office give me a call at 317-575-8222 x 12.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.
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