People who file for Chapter 13 bankruptcy must take the time to think about how this is going to impact their finances. There are three primary concerns that you might have when you make this decision. First, you know that your debts will be rolled into one payment. Second, you will have to make payments to the bankruptcy trustee. Third, you will need to live without credit for a while since you can't take on new credit without the bankruptcy court's permission.
When you put all of these factors together, you can see that things will be tight financially for the duration of your bankruptcy. The court will set out the terms of these payments for you. These are made for three to five years, depending on what is necessary for your case. The trustee will send them out to the creditors based on a formula set by the court.
Figuring out what your payments will be can be difficult. The court considers your income and your necessary expenses. From there, it looks at the type of debt and the amount of those debts. In some cases, the value of assets you are allowed to keep will also be factored in.
Once you have completed all the payments required through the trustee, any balances remaining on your debts will be dismissed. There are some that must be paid in full, but these priority debts are wholly factored into the payments you make. Estimating what your payments might be can help you determine exactly how the Chapter 13 filing might impact your financial situation.