It is possible to file bankruptcy without an attorney, and Chapter 13 cases present even more challenges for pro se filers than Chapter 7 cases. More forms, more calculations, and a payment plan must be approved by a Chapter 13 trustee and a judge.
Chapter 13 debtors must file either one or two forms that together determine the duration and available income for a Chapter 13 repayment plan.
The first form is the Chapter 13 Statement of Your Current Monthly Income and Calculation of Commitment Period, Official Form B122C-1. This calculates your average monthly income and uses that figure to determine whether your case should last three years or as long as five years. In short, if your family income is less than the median for your state, your plan needs to last only three years. If your family income is more than the median, it needs to last five years. The median is the point at which 50% of families fall above and 50% fall below.
The second form is the Chapter 13 Calculation of Your Disposable Income, Official Form B122C-2. This calculates the difference between your income and your reasonable and necessary monthly expenses. If your income is higher than your expenses, you have disposable income. At least a part of that disposable income will be included in your Chapter 13 payment and will be used to pay allowed claims for unsecured debts like credit cards and medical bills.
While your income may be pretty easy to determine for the first form, there may be room for disagreement on whether certain expenses are reasonable or not on the second form. Some are set out for you in the calculation, based on national or regional averages, but others can be customized based on your particular circumstances. Getting those amounts approved by a Chapter 13 trustee can be the trickiest part of a Chapter 13 case.
Chapter 13 Plans
Once the income and expense calculations have been made and the commitment period has been determined, a payment plan can be calculated. The payment plan will include amounts for
- Disposable income from Official Form B122C-2.
- Arrearages owed to mortgage creditors
- Priority debts like back taxes
- Arrearages owed to car creditors
- Attorneys fees, if being paid through the plan
- Administrative fees to the Chapter 13 trustee
- Value of non-exempt assets
In some districts, known as conduit jurisdictions, debtors are required to make their entire house payment through a Chapter 13 trustee, not just an amount to cover arrearages. Conduit payments permit trustees to maintain accurate recordkeeping and better oversight of the debtor’s progress and adherence to the Chapter 13 plan.
It is possible to include your entire car payment in the plan and even adjust your interest rate or the amount of the principal you will repay if your car loan was at least 2 ½ years old when you filed the bankruptcy case.
Your Chapter 13 Plan Form may be either the Official Form or an approved local variation, depending on the jurisdiction in which a case is filed. Those can be found on the website for the court or the website for the Chapter 13 trustee to which the case has been assigned.