Credit and Bankruptcy Law

Chapter 13

What is disposable income?

Disposable income refers to whatever is left over from your total income after you have paid for taxes and reasonable and necessary living expenses, as determined on a monthly basis. This is arguably the most important calculation in Chapter 13 cases, as this determines how much money you will repay and how much money you will have for regular living expenses. The Bankruptcy Code defines “disposable income” as follows:

For purposes of this subsection, the term “disposable income” means current monthly income received by the debtor (other than child support payments, foster care payments, or disability payments for a dependent child made in accordance with applicable nonbankruptcy law to the extent reasonably necessary to be expended for such child) less amounts reasonably necessary to be expended….


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