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How to determine your disposable income

| Mar 31, 2020 | Chapter 13 |

When you file for Chapter 13 bankruptcy, you are committing to make payments monthly for three to five years. These payments come from what the court calls your disposable income. We often help people to calculate what their disposable income is. 

According to the U.S. Courts, here is some of the information that will help determine how much of your income you will need for necessities, and consequently, how much you may have left over to make payments to the bankruptcy trustee. 

Your dependents 

Many of your answers will depend on how many people you claim as exemptions on your federal tax return, as well as any other dependents you support. This is not necessarily the same as the number of people in your household. 

The IRS national standards for expenses 

The IRS issues set amounts for expenses such as food, clothing and other necessities. You can access this table on the IRS website to see the amount you can claim based on the number of dependents you have. 

Health care expenses 

The IRS also provides standard amounts for out-of-pocket health care expenses. You must add the amount you pay each month above this amount and the amount that you pay for health insurance. 


Transportation information includes operating expenses and vehicle leases or loan payments for up to two vehicles. If you do not claim any vehicles, then you would claim the IRS local standard for public transportation. If you have vehicles and you also use public transportation, you can claim the amount you use, on average, but the amount cannot exceed the IRS standard. 

Other expenses 

You may also claim the following: 

  • Certain education expenses 
  • Child care costs 
  • Taxes 
  • Some life insurance premiums 
  • Court-ordered payments such as child support and alimony 

You may also be able to claim limited telephone and communication services that are necessary for your family’s health and welfare (not including home phone, internet and cellphone services). You may also claim telephone services that you need for your job that your employer does not reimburse you for, or that you have not claimed for self-employment expenses. 

More information about Chapter 13 bankruptcy repayment plans is available on our webpage.