The amount you are required to pay back to your general unsecured creditors in a Chapter 13 Bankruptcy Case depends on various factors. It can range from only about a few pennies on the dollar to 100% of the debt. The amount required to be paid must be the higher of the "means test” (projected disposable income) and the amount of the chapter 7 liquidation test.
Means Test
The amount you are required to pay back must be at least the amount of your "projected disposable income" as calculated by the "means test" used in Chapter 13. Basically, your monthly income is calculated and your expenses are deducted, leaving the "projected disposable income."
For purpose of this test, your income is based on the income for the six months period prior to the filing of the bankruptcy case. The expenses used in these test are not your actual living expenses, but they are amounts based on the IRS collection standards for certain items and actual mortgage and car loan debts.
The amount of expenses is deducted from the income leaving the monthly "projected disposable income." Debtor with income less than median income will only be required to pay for three years, but over-median income debtors are required to pay for five years.
Chapter 7 Liquidation Test
The amount required to be paid back in a Chapter 13 case must be at least as much as the "chapter 7 liquidation test" which is the amount that could be received on a hypothetical chapter 7 liquidation of your property.
