How Can I Calculate Disposable Income in Chapter 13 Bankruptcy?
Posted By Jacoby & Jacoby on Aug 9, 2010 2:26pm PDT
First, determine your regular monthly income by taking an average of the last six months of pay. Add any other forms of income, including part time jobs or fixed income payments. You do not need to include incoming child support payments. If you can’t prove that you are making a regular income each month, you will be unable to file for Chapter 13.
Next, list your living expenses, including mortgage or rent, groceries, insurance and utilities. Also include charitable contributions up to 15 percent of your gross income. Subtract your expenses from your regular income already determined. The result is called disposable income, which is the amount used to determine your three- or five-year repayment plan. Note that the
Chapter 13 bankruptcy laws mandate that a bankruptcy judge or trustee use a specific standard to calculate disposable income. When you submit your plan after determining your income and expenses, they may adjust the plan to meet legal requirements based on allowable expenses.