Chapter 13 Payments - Defined
Changes in Chapter 13 payment requirements increase month burden for debtors
|The legal definition of "Chapter 13 Payments" - All disposable income, after deduction of a National Standard Living Expense, must be paid to the Trustee for disbursement for the benefit of creditors. Expenses are determined by number of persons in the household, with little, if any, consideration given to personal needs, disabilities, poor health, or transportation needs.|
In the past, judges approved proposed Chapter 13 payments on a case by case basis. Each individual plan was reviewed based on income earned, and the reasonableness of monthly expenses. Under the new Code amendments, all people are presumed to require the same living expenses, with slight variations allowed in several different states because of variations in average costs. For instance, the amount permitted for living expenses in most large metropolitan areas is the same as if living on a farm near a small town in the Midwest. A few states however are notoriously high compared to all others, and the rules permit small increases (through scheduled terms).