Chapter 13
How much do you pay in Chapter 13, and for how long?
A Chapter 13 payment is calculated from three things: how long the plan must run, your disposable income over that period, and what unsecured creditors would have received in Chapter 7. If your income is below your state's median, the plan is generally three years unless the court approves a longer period; if it is above, generally five, and no plan can run longer than five. If the trustee or an unsecured creditor objects, the plan must commit all of your projected disposable income for that period, and unsecured creditors must receive at least what a Chapter 7 liquidation would have paid them.1 2 3
Connect to a bankruptcy lawyerPlan length and plan payment are not picked freely. Both follow from your income compared with your state's median, and from what your creditors would have received in Chapter 7.
General information, not legal advice. Rules and amounts change; check with a lawyer or the court before you act.
In this guide
the commitment period for a Chapter 13 plan, depending on whether income is below or above the state median3 1 2
11 U.S. Code § 1325(b)(4) (Cornell LII) and Chapter 13 - Bankruptcy Basics (uscourts.gov) and Chapter 13 - Bankruptcy Basics and 11 U.S. Code § 1322(d) (Cornell LII)
How long does a Chapter 13 plan last?
The length turns on one comparison: your current monthly income against the median income in your state.1 2
| Your income | Plan length |
|---|---|
| Below the applicable state median1 2 | Generally three years, unless the court approves a longer period for cause |
| Above the applicable state median1 2 | Generally five years |
| Any income1 2 3 | Never longer than five years, and shorter than the required period only if unsecured claims are paid in full sooner |
The law calls the required period the applicable commitment period. It is 3 years, or not less than 5 years when the income comparison comes out at or above the median.3 1
How is your income compared with the median?
The comparison uses current monthly income, which is your average monthly income from all sources over the 6 calendar months before you file. It does not include Social Security benefits. In a Chapter 13 case the income of you and your spouse combined is multiplied by 12 and set against the median family income for your state.4 5 3 1
The median figures are published by the U.S. Trustee Program and are updated regularly, so use the table that applies on your filing date.6
The official form for this step is Form 122C-1, Chapter 13 Statement of Your Current Monthly Income and Calculation of Commitment Period.7
What counts as disposable income?
In Chapter 13, disposable income is your income, other than child support payments you receive, less the amounts reasonably necessary for the maintenance or support of you and your dependents, and less charitable contributions of up to 15% of your gross income. If you run a business, the amounts necessary for its ordinary operating expenses are taken out too.1 3
How the necessary expenses are worked out depends on the same median comparison. If your income is above the median, they are determined under the means test's expense rules, which use the IRS National Standards and Local Standards for the area where you live.3 8
The official form for this calculation is Form 122C-2, Chapter 13 Calculation of Your Disposable Income.7
What sets the amount you pay?
A plan does not have to pay unsecured debts such as credit cards in full. It does have to pass the tests below, and it must also provide for the other kinds of claims.
- The disposable income test. If the trustee or an unsecured creditor objects, the court may not approve the plan unless it pays that claim in full or commits all of your projected disposable income for the commitment period to unsecured creditors.3
- Priority claims, such as most taxes, which must be paid in full unless the creditor agrees otherwise.1
- Secured claims. To keep the collateral, the plan must give the creditor at least the value of the collateral, and missed mortgage payments must be made up during the plan.1
- The trustee's fee. The Chapter 13 trustee collects a percentage fee from the plan payments, and for a debtor who is not a family farmer the law caps it at ten percent.10
The court must also find that you will be able to make all the payments, so base the plan on what you can keep up in an ordinary month. Payments to the trustee start within 30 days after filing, even before the court approves the plan.3 1
Can you finish a plan early?
Only by paying in full. The commitment period may be shorter than 3 or 5 years only if the plan pays all allowed unsecured claims in full over a shorter period.3 1
What if your income changes or you cannot keep up?
Speak up before payments are missed. After confirmation and before the payments are complete, you, the trustee or an unsecured creditor may ask the court to modify the plan, for example to lower the payments or to change how long they run.1 11
If you fail to make the payments due under a confirmed plan, the court may dismiss the case or convert it to Chapter 7. The discharge comes only after you complete all payments under the plan, so a plan that fails late can leave you without it.1 12 13
There is a narrow exception. You may ask the court for a hardship discharge, which is generally available only if the failure to finish is due to circumstances beyond your control and through no fault of yours, creditors have received at least what they would have in a Chapter 7 liquidation, and modifying the plan is not possible.1
Common questions
Can I choose a three-year plan if my income is above the median?
If your current monthly income is above the applicable state median, the plan generally must be five years. It can be shorter only if unsecured claims are paid in full over a shorter period.1 2 3
Can a plan last longer than five years?
No. A plan cannot provide for payments over a period longer than five years.1 2
Do child support payments I receive count as disposable income?
No. Disposable income is income other than child support payments the debtor receives, less necessary expenses.1 3
Where do the median income figures come from?
The U.S. Trustee Program publishes the Census Bureau median income figures and IRS expense standards used in these calculations, and updates them regularly.6
Sources
Official courts & government references- Chapter 13 - Bankruptcy Basics
- 11 U.S. Code § 1322(d) (Cornell LII)
- 11 U.S. Code § 1325(b)(1) (Cornell LII)
- Chapter 7 - Bankruptcy Basics (uscourts.gov)
- 11 U.S. Code § 101(10A) (Cornell LII)
- U.S. Trustee Program: Means Testing
- Bankruptcy Forms (uscourts.gov)
- 11 U.S. Code § 707(b)(2)(A)(ii)(I) (Cornell LII)
- 11 U.S. Code § 541(a)(1) (Cornell LII)
- 28 U.S. Code § 586(e) - Duties; supervision by Attorney General (Cornell LII)
- 11 U.S. Code § 1329(a) (Cornell LII)
- 11 U.S. Code § 1307(c) (Cornell LII)
- Discharge in Bankruptcy - Bankruptcy Basics (uscourts.gov)