Will I Have Money to Live on During a Chapter 13?

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One of the biggest questions anyone has when they are considering the option of filing for Chapter 13 bankruptcy is, “how much will I have to pay every month, and will I be able to live?” The answer to this question, no matter the state you live in, depends directly on several different factors about your bankruptcy filing in general, as well as the specifics of your financial situation as a whole. You also need to consider the rules for your state, so if you live in Georgia, for example, you'd need to ask will i have any money to live on if i file chapter 13 in GA

Chapter 13 Bankruptcy Plan

The first thing you should know is that the court isn’t out to break you. Your Chapter 13 bankruptcy filing is simply a means of utilizing the court to arrange a monthly payment option that will satisfy all of your debt to listed creditors so that you don’t end up having to part with all of your assets.  

  • The monthly payment plan is typically calculated by the court in the state of Georgia by assessing how much debt a person owes to creditors, versus the amount of income sources the debtor has. 
  • In order to have your list of creditors agree to you Chapter 13 filing and not contest it, you will have to prove that you are able to afford the monthly payment plan. Most creditors won’t concern themselves too much with what you have left over. 
  • The responsibility lies on you to determine whether or not you are going to be able to handle having the monthly installment plan while maintaining your basic needs and the basic needs of your family. 
  • You won’t be able to establish any new form of credit once you’ve filed for Chapter 13 for a period of several years, and your repayment plan will last for 3-5 years so it’s very important you know that once you’ve filed your petition for bankruptcy, your financial situation will be unchanged for at least that long. 

Converting your Bankruptcy 

If at any point in your Chapter 13 filing you come to the realization that you are not going to be able to make your monthly payments while covering your basic needs, you do have the legal option of converting your Chapter 13 filing into a Chapter 7 bankruptcy as a means of discharging your debts without being responsible for the monthly installment plan. You will probably meet some resistance from your creditors, so if you consider converting your bankruptcy, be sure you can prove that there is no way for you to make the monthly installment payments.  

Getting Help

If you have questions regarding your bankruptcy and what chapter you should file or petition for, you should seriously consider obtaining advice from a bankruptcy lawyer. Your lawyer can explain what your options are and help you choose the best course of action for your financial situation.

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