Many times debtors who are considered “above median income” by the bankruptcy courts worry about their ability to pay bankruptcy repayment plans and the length of time they will be required to remain in Chapter 13 bankruptcy. Because many “above median income” debtors lack disposable income or have experienced recent financial disruptions, their financial ability to pay on paper does not match the reality of their circumstance. There has been some confusion about this point because in the past, “above median income” debtors filing for Chapter 13 bankruptcy were required to either pay their debts in full or to partially/fully repay creditors over the course of 60 months, even if they didn’t have any disposable income. However, recently bankruptcy courts have begun considering the debtor’s “real” income and expenses to determine a more feasible Chapter 13 bankruptcy repayment plan. Basically, “above median income” debtors can expect that the bankruptcy court will consider the debtor’s real ability to pay when determining the amount of the repayment plan over the course of 60 months.
If you’re an above median income debtor with little or no disposable income, Chapter 13 bankruptcy can still be a viable option. Generally speaking, bankruptcy courts will allow you to pay based on your ability and take into consideration your current financial obligations and income. To find out your bankruptcy options speak with a bankruptcy attorney today.