In a Chapter 13 filing you typically can keep your assets, but you will need to propose a repayment plan with a three to five year time line as part of your case filing. Your repayment plan is a document that describes in detail how you plan to repay your debts and how much you propose to pay. A bankruptcy judge will review the plan and check for compliance with Chapter 13 bankruptcy laws and its feasibility. Based on these criteria, the bankruptcy court either approves or disapproves the repayment plan.

Important Factors
To determine your payments, several factors are considered. First, your expected monthly household income is crucial. Your gross income is then used as the base number for the “means test,” a test used to establish whether you have enough disposable income left after considering allowable deductions to pay your creditors. Furthermore, you need to compile a schedule of your assets, which then is categorized in exempt assets versus non-exempt ones. This is important, since unsecured creditors are entitled to a minimum of your non-exempt assets’ worth.

Debt Priority
In a Chapter 13 bankruptcy, so called “priority debt” such as back wages owed to employees, child support, alimony, tax debts and student loans must be paid in full. Secured debt like car loans and mortgages including any past due amounts must be covered in your repayment plan. All remaining disposable income will go to paying some of your unsecured debts, after having paid priority and secured debts first. The disposable income is calculated using formula set by the bankruptcy court based on the factors outlined above. Rarely are unsecured debts paid in full. The repayment plan must demonstrate that any disposable income will go towards unsecured debt payment. If you have sizable assets, the amount you have to pay towards unsecured debt could be higher since the assets could be theoretically seized by the trustee were you to file Chapter 7 bankruptcy.

Duration
The duration of your payment plan is largely dependent on your earnings and debt six months prior to bankruptcy filing. Usually a five-year plan proposal is expected for average monthly incomes is higher than the median income for your state. If your income is lower than the median, you may propose a three-year plan.