In general people file bankruptcy under two chapters and these are Chapter 7 and Chapter 13. In case of Chapter 7 bankruptcy, you are required to handover all of your assets to the bankruptcy trustee. They analyze your debt amount and then sell off the assets to pay the creditors and lenders. However, in case of Chapter 13 bankruptcy, you are required to make the debt payments through a reorganization plan ascertained by the court. Thus, in this case you can retain your assets. Thus, it becomes important for you to calculate the payments through a useful mortgage calculator. In the same way, you can use Chapter 13 bankruptcy calculator.
Calculating the bankruptcy payments
The bankruptcy proceedings under Chapter 13 bankruptcy involve helping out the debtor so as to allow him/her to pay off debts using future earnings. Thus, in case of Chapter 13 bankruptcy you do not lose your assets. Rather the bankruptcy trustee is appointed to check your assets. The bankruptcy proceedings can be entered by you as a debtor or can also be initiated by the creditors. After the bankruptcy is filed, the creditors cannot seek to collect the debts directly from you, outside the process of distribution by the bankruptcy trustee. You cannot even sell off or gift your assets and property to anyone which has been declared as part of your bankruptcy estate.
So, how can you calculate the payments that you will be required to make to the creditors under Chapter 13 bankruptcy? Now, in order to calculate the payments, you need to first understand that there are three main types of creditors to whom you owe the debts. So, the three main types of creditors are the unsecured, secured and the post creditors. Moreover, the post creditors and the secured creditors are not considered in the payment calculations in case of Chapter 13 bankruptcy.
Now, in order to calculate the monthly bankruptcy payments under Chapter 13 bankruptcy, you will have to make a list of the estimated monthly expenditure. This will include the utilities and tuition payments, the tax and food payments, payments on other necessities, mortgage, car loan and other debt payments. However, expenditures on entertainment, vacations and other such expenses are not considered. In addition, you will have to calculate the regular monthly income coming from all kinds of sources.
After that, you will have to subtract all of the necessary expenses from regular monthly income (gross) to get some idea on the cash figure. Like, if you have a stable monthly income; let us take around $3,000 and if the secured creditor payments amounts to $2,600 then around $400 will be available for the unsecured debt payments. This is considered to be the key calculation in case of bankruptcy payments.
Now, if your affordability rises, you can talk to the court and the trustee. They may analyze the situation and help you in increasing the amount that you are required to pay each month to the creditors under the bankruptcy program.
Other than calculating the payments on your own, you can also use a bankruptcy calculator. Just like a mortgage calculator, you will easily be able to find a bankruptcy calculator with various websites. You can use such calculators to calculate the monthly payment that you will be required to make under the Chapter 13 repayment plan.
So, you can see that in both ways you can calculate the payments that you will be required to make to the creditors under bankruptcy. This is going to help you in maintaining the payments and get out of the bankruptcy early enough.