In Wyoming, calculating your Chapter 13 bankruptcy payment is not straightforward; there is no single, fixed amount. Instead, your monthly payment is determined by a combination of key financial factors, including your income, necessary living expenses, priority debts that must be fully repaid, the value of your assets, and the duration of your repayment plan. Please continue reading as we delve into how these elements combine, providing a clearer understanding of how your Chapter 13 monthly payment is calculated and how our experienced Wyoming Chapter 13 Bankruptcy Lawyers can help you set realistic expectations before filing. 

What is a Chapter 13 Plan Payment?

The notion that a standard “Chapter 13 payment” is for everyone is a common misconception. Instead, the payment amount is highly individualized. It is calculated based on a detailed analysis of your personal financial circumstances, including your income, essential expenses, the specific debts you owe, and the value of your property.

Even those with comparable income may face significantly higher monthly payments if one is managing arrears on a mortgage or car loan, while the other is addressing priority debts like back child support or tax obligations. Furthermore, variations in household size, living expenses, and property exemptions will contribute to the final, tailored payment amount.

What Key Factors Determine Your Monthly Payment in Wyoming?

Chapter 13 payments are determined by several factors:

  • Disposable Income: Your average monthly income from the six months before filing, minus reasonable and necessary expenses, is your “projected disposable income.” This amount must be committed to the plan, meaning more disposable income results in a higher monthly payment.
  • Mandatory Debts: Certain debts must be paid in full, increasing the minimum payment. These include:
    • Priority debts (e.g., certain taxes, domestic support arrears).
    • Secured arrears for property you keep (e.g., past-due mortgage or car loan payments).
    • Trustee and, often, attorney’s fees.
    • It should be noted that if you are saving a home from foreclosure or keeping a vehicle, the plan must fully catch up the arrears.
  • “Best Interest of Creditors” Test: Unsecured creditors must receive at least as much as they would in a Chapter 7 liquidation of your non-exempt property. If you have non-exempt property, a minimum payment to unsecured creditors may be required, which can also increase your monthly payment.

Can I Lower My Chapter 13 Payment?

If you experience a significant change during your plan, such as job loss, new medical expenses, or other major financial setbacks, you have the option to seek a modification to address these issues. This modification can allow you to reduce your monthly payment, extend the plan’s terms, or convert your case to Chapter 7 bankruptcy (if eligibility requirements are met). It is crucial to address financial issues promptly. Failing to do so can lead to your case being dismissed and the loss of your bankruptcy protection.

If you are considering Chapter 13, it is in your best interest to consult with an attorney at 307 Bankruptcy who can help you build an affordable, court-approvable plan.