How Chapter 13 Payments Are Determined
Your Chapter 13 plan payment is not a number your attorney picks out of thin air. It is determined by federal bankruptcy law -- specifically 11 U.S.C. Section 1325(b) -- and must satisfy three independent tests. Your actual payment will be the highest amount required by any of them.
Understanding these tests is critical because they set both the floor and the ceiling for what you will pay over the life of your plan. If your payment is set too low, the trustee or a creditor will object and the court will not confirm your plan. If it is set higher than required, you may be paying more than necessary.
Test 1: The Disposable Income Test
Under Section 1325(b)(1)(B), if the trustee or an unsecured creditor objects to confirmation, the plan must commit all of your "projected disposable income" to plan payments during the applicable commitment period.
Disposable income is defined as your current monthly income (CMI) minus amounts reasonably necessary for the maintenance and support of yourself and your dependents. For above-median-income debtors, the "reasonably necessary" expenses are determined using the means test standards from Section 707(b)(2) -- the same IRS expense categories used to determine Chapter 7 eligibility. For below-median debtors, the court uses your actual expenses as reported on Schedule J.
Current monthly income is calculated by averaging your gross income from all sources over the six full calendar months before your bankruptcy filing date. This includes wages, salary, overtime, business income, rental income, pension and retirement distributions, and regular contributions from others. It does not include Social Security benefits.
Test 2: The Best Interest Test (Liquidation Analysis)
Under Section 1325(a)(4), unsecured creditors must receive at least as much through your Chapter 13 plan as they would have received if you had filed Chapter 7 instead. This is called the "best interest of creditors" test.
In a Chapter 7 case, a trustee would liquidate your non-exempt assets and distribute the proceeds to creditors. If you have $10,000 in non-exempt assets and $50,000 in unsecured debt, the Chapter 7 dividend would be 20 cents on the dollar. Your Chapter 13 plan must pay at least that same 20% to unsecured creditors.
If you have no non-exempt assets -- which is common -- the Chapter 7 dividend would be zero, and this test does not set a meaningful floor. But if you have significant equity in property above your exemption limits, this test can require substantial payments.
Test 3: The Feasibility Test
Under Section 1325(a)(6), the court must find that you will be able to make all payments under the plan. A plan that looks good on paper but would leave you unable to pay rent or buy groceries will not be confirmed. The court examines your budget (Schedules I and J) to verify that the proposed payment is realistic given your actual income and expenses.
The Applicable Commitment Period
The length of your plan is governed by the "applicable commitment period" under Section 1325(b)(4). It depends on whether your income is above or below the median for your state and household size:
- Below median income: The applicable commitment period is 3 years (36 months). However, the court may approve a longer plan up to 5 years if needed to pay priority debts, cure mortgage arrears, or for other cause.
- Above median income: The applicable commitment period is 5 years (60 months). You must commit all disposable income for the full 60 months unless you pay 100% of unsecured claims sooner.
You can check whether your income is above or below the median using the means test at meanstest.org. The median income figures are published by the Census Bureau and updated periodically by the U.S. Trustee Program.
Estimate Your Payment
Important: This calculator provides a rough estimate only. Actual Chapter 13 payments depend on many factors not captured here, including secured debt arrears, priority tax claims, attorney fees, trustee percentage, and local court practices. Do not rely on this estimate as legal advice.
Average of last 6 months. Include wages, business income, rental income, etc. Exclude Social Security.
Housing, food, transportation, insurance, medical, childcare, etc.
Total value of property you could not protect with exemptions in a Chapter 7. Enter 0 if unsure.
Credit cards, medical bills, personal loans, deficiency balances, etc.
Check at meanstest.org if you are unsure.
Estimated Results
This estimate does not include trustee fees (typically 4-10%), attorney fees, secured debt arrears, or priority claims -- all of which increase your actual payment. Consult with a bankruptcy attorney for an accurate calculation.
What the Calculator Does Not Include
The estimate above covers only the disposable income and best interest tests for unsecured creditors. In practice, your monthly Chapter 13 payment also funds:
- Mortgage arrears: If you are behind on your mortgage, the plan must cure the entire arrearage over the plan term, which increases your monthly payment.
- Priority debts: Domestic support obligations (child support, alimony) and most tax debts classified as priority under Section 507 must be paid in full through the plan.
- Secured debt through the plan: Some plans pay car loans or other secured debts directly through the trustee, adding to the monthly payment.
- Attorney fees: Your bankruptcy attorney's fees are often paid through the plan, typically $3,000-$5,000 depending on the district.
- Trustee fees: The Chapter 13 trustee takes a percentage of all plan payments (typically 4-10%) as compensation. This means your gross payment must be higher than the net amount distributed to creditors.
Frequently Asked Questions
How much will my Chapter 13 payment be?
Your payment depends on your disposable income, the value of your non-exempt assets, and the specific debts included in your plan. At minimum, it must equal your monthly disposable income (if the trustee objects) and must pay unsecured creditors at least as much as they would receive in a Chapter 7 liquidation. Many debtors pay between $200 and $2,000 per month, but the range varies enormously.
Can my payment change during the plan?
Yes. Section 1329 allows the debtor, the trustee, or an unsecured creditor to request a plan modification after confirmation. If you lose your job, get a raise, or experience a significant change in expenses, the payment can be adjusted up or down. The modified plan must still satisfy the best interest test and be feasible. See our plan modification guide and our detailed page on modifying your plan after confirmation.
What is disposable income in Chapter 13?
Disposable income is your current monthly income minus amounts reasonably necessary for your maintenance and support. For above-median debtors, allowed expenses follow the means test formula from Section 707(b)(2) -- standardized IRS expense categories plus actual payments on secured debts. For below-median debtors, the court typically uses actual reasonable expenses. The means test is explained in detail at meanstest.org.
What happens if I cannot afford the minimum payment?
If your disposable income is zero or negative, you may still file Chapter 13 -- but only if you can propose a feasible plan that satisfies the best interest test and pays all required priority and secured debts. If that is not possible, Chapter 7 may be a better option (assuming you qualify under the means test). If you are already in an active case and cannot keep up, you may request a plan modification, convert to Chapter 7, or seek a hardship discharge under Section 1328(b).
Related Resources
- meanstest.org -- Determine if your income is above or below the state median
- section1328.org -- Chapter 13 discharge rules and the superdischarge
- How Plan Payments Work -- Payment collection, missed payments, and catch-up
- dismissalrate.org -- Chapter 13 dismissal and failure rates by district
Last updated: March 2026