There is no single average monthly payment for Chapter 13 bankruptcy, because every plan is custom-built from your income, debts, assets, household size, and the state you file in. A debtor with modest income and few secured debts might pay around $200 a month. Someone earning above their state’s median with mortgage arrears and back taxes could pay $2,000 or more. The monthly figure is a stack of separate calculations layered on top of each other, and the plan has to satisfy all of them at once.
How the Payment Is Actually Built
Think of the monthly payment as three floors and a set of add-ons. The first floor is debts federal law says you must pay in full through the plan. The second floor is your disposable income under the means test. The third floor is a liquidation comparison that protects unsecured creditors. Whichever combination of these produces the highest number is what your creditors receive each month. Then administrative costs get grossed up on top of that so the check you actually write is larger still.
Debts That Must Be Paid in Full
Certain debts create a hard floor under the monthly payment no matter what your budget looks like.
Mortgage Arrears and Regular Secured Payments
If you want to keep your house or car, the plan has to keep making the regular contractual payments on those loans. Chapter 13 also lets you catch up missed payments over the life of the plan, which is one of the main reasons people file.1Office of the Law Revision Counsel. 11 US Code 1322 – Contents of Plan Spreading $15,000 in missed mortgage payments over a 60-month plan adds roughly $250 a month on top of the regular mortgage payment. That arrearage cure is non-negotiable if you want to save the home.
A growing number of districts run “conduit” mortgage plans, where the trustee collects your entire mortgage payment and forwards it to the lender. Your regular mortgage payment flows through the plan, so the monthly check to the trustee looks larger even though much of it simply passes through.
Car Loans and the 910-Day Rule
If you bought your car more than 910 days before filing, Chapter 13 lets you reduce the secured portion of the loan to the vehicle’s current market value.2Office of the Law Revision Counsel. 11 USC 1325 – Confirmation of Plan Owe $25,000 on a car worth $18,000, and only $18,000 has to be repaid in full at a court-approved interest rate. The remaining $7,000 drops into general unsecured debt. If you financed the car inside that 910-day window, you pay the full balance, and the monthly number reflects it.
Priority Taxes and Support Arrears
Priority debts must be paid in full through the plan before general unsecured creditors receive anything.1Office of the Law Revision Counsel. 11 US Code 1322 – Contents of Plan The two you see most often are recent income taxes and back child support or alimony. Income taxes generally qualify as priority when the return was due within three years before filing.3Office of the Law Revision Counsel. 11 US Code 507 – Priorities A $12,000 priority tax bill spread over 60 months adds $200 a month before anything else is considered. For many filers, priority debt is the single biggest driver of a higher payment.
Disposable Income and the Means Test
Once the mandatory debts set the floor, the means test decides how much extra you owe general unsecured creditors like credit cards and medical bills. It starts with your “current monthly income,” which is your average gross income over the six full calendar months before filing.4United States Department of Justice. U.S. Trustee Program – Means Testing That figure is annualized and compared against the median income for your state and household size.
If You Are Below the State Median
Below-median filers use their actual income and actual expenses as reported on their bankruptcy schedules. The commitment period is three years, though the court can approve longer if circumstances warrant.5United States Courts. Chapter 13 – Bankruptcy Basics If real expenses leave little surplus, the required payment to unsecured creditors can be small, sometimes zero.
If You Are Above the State Median
Above-median filers face a stricter calculation. Instead of actual living expenses, the means test uses standardized IRS expense allowances for food, clothing, housing, transportation, and medical costs.6United States Department of Justice. U.S. Trustee Program – Means Testing Those allowances often run lower than what people actually spend, which inflates the disposable income figure on paper. You can still deduct actual payments on secured debts you plan to keep and priority debt obligations. What remains has to go into the plan every month for five years.2Office of the Law Revision Counsel. 11 USC 1325 – Confirmation of Plan If the means test calculates $800 a month in disposable income, the minimum contribution to unsecured creditors totals $48,000 over the plan.
The Liquidation Test Sets a Second Floor
Even after disposable income sets a minimum, a separate rule can push the payment higher. The “best interests of creditors” test requires that unsecured creditors receive at least as much through your Chapter 13 plan as they would have gotten if you had filed Chapter 7 and your non-exempt assets were sold.2Office of the Law Revision Counsel. 11 USC 1325 – Confirmation of Plan
Non-exempt assets are anything you own with value above what your state’s exemption laws protect. If you have a boat or investment account holding $15,000 in non-exempt equity, unsecured creditors have to receive at least $15,000 through the plan. If disposable income only required $10,000, the monthly payment bumps up by roughly $83 to close the gap over 60 months. Whichever is larger, disposable income or liquidation value, wins.
Trustee Fees, Attorney Fees, and Other Add-Ons
Once the debt-based math is set, several administrative costs get layered on and are easy to miss when estimating what you will really pay.
The Trustee’s Cut
The Chapter 13 trustee collects your payments and distributes them to creditors, and takes a percentage fee off the top. Federal law caps it at 10% of plan payments.7Office of the Law Revision Counsel. 28 US Code 586 – Duties; Supervision by Attorney General In practice, most trustees charge between 3% and 10% depending on the district. If creditors are owed $1,000 a month and the trustee charges 6%, you pay about $1,064 so that $1,000 actually reaches creditors.
Attorney Fees Paid Through the Plan
Most Chapter 13 attorneys work under a “no-look” fee arrangement, where the court pre-approves a standard fee that gets paid through the plan rather than requiring a large retainer. No-look fees generally fall between $3,000 and $6,000 depending on the district. On a 60-month plan, $4,800 in attorney fees adds $80 to the monthly payment. These fees are administrative expenses and come off the top before unsecured creditors are paid.
Filing Fee and Required Courses
The court filing fee is $313 and can be paid in installments. Two mandatory financial education courses (one before filing, one during the case) run roughly $20 to $25 per household each. Small numbers, but real ones.
How Plan Length Reshapes the Monthly Number
Duration divides your total obligation, so it drives the monthly figure as much as anything else. Below-median filers commit to three years. Above-median filers must commit to five.2Office of the Law Revision Counsel. 11 USC 1325 – Confirmation of Plan Below-median filers can voluntarily extend to five years if they need more time.
A debtor who has to pay $30,000 total over 36 months owes $833 a month. Stretch the same $30,000 across 60 months and the payment drops to $500. Above-median filers cannot go shorter than five years unless they pay all unsecured claims in full sooner.
What Happens to Your Tax Refund
A cost many filers overlook is the annual tax refund. Trustees in most districts treat refunds as projected disposable income, and expect you to turn them over to the plan if unsecured creditors are not being paid in full. The legal basis is the same projected-disposable-income rule that drives the means test.2Office of the Law Revision Counsel. 11 USC 1325 – Confirmation of Plan If you usually get a $3,000 refund each spring, that money will likely flow to creditors instead of your bank account for the length of the plan. Some trustees allow exceptions for documented emergencies, and plans paying unsecured creditors in full generally do not require turnover.
Why Two Similar Filers End Up With Different Payments
Two people with nearly identical incomes can end up with wildly different monthly payments. A few variables explain most of the gap.
State Exemption Laws
Where you file determines how much property is protected from the liquidation test. Some states offer generous homestead protections that essentially eliminate non-exempt home equity, keeping the liquidation floor low. Others cap the homestead exemption at modest amounts, so significant equity can force a much higher payment. This one variable can swing the liquidation number by tens of thousands of dollars.
Local Trustee Practices
Federal law sets the framework, and the local trustee and bankruptcy judge fill in the gaps. Some trustees scrutinize claimed expenses more aggressively than others. The IRS housing and utility allowances used in the means test vary by county. How the trustee values a car or other asset (national pricing guide versus local appraisal, for example) affects the numbers that flow into the payment formula.
Changing the Payment After the Plan Is Confirmed
The monthly payment is not fixed for the full three or five years. If your financial situation changes substantially, you, the trustee, or a creditor can request a modification.8Office of the Law Revision Counsel. 11 US Code 1329 – Modification of Plan After Confirmation A job loss or serious medical event can justify a lower payment. A raise or inheritance can prompt the trustee to seek an increase. Modifications can also extend or shorten the timeline within the 60-month maximum. The modified plan still has to satisfy the same legal tests as the original, so the floors can move but they never disappear.