Expense Information For Use In Ch 13 Bankruptcy Calculations 2018

An expert tool to estimate your monthly disposable income for Chapter 13 bankruptcy using 2018 IRS means test figures.

Expense Category	Allowed Amount	Description
Housing & Utilities		Based on actual cost up to local standards.
Food, Clothing & Other		Based on 2018 IRS National Standards.
Transportation		Based on 2018 IRS Local Standards (Ownership + Operating).
Out-of-Pocket Health Care		Based on 2018 IRS National Standards.
Taxes		Your actual monthly tax burden.
Other Necessary Expenses		Child support, child care, etc.
Total Allowed Expenses		Sum of all allowed deductions.

Table 1: Breakdown of estimated monthly expenses allowed under the Chapter 13 Means Test for 2018.

What is a Chapter 13 Expense Calculator?

A Chapter 13 Expense Calculator is a financial tool designed to estimate your “disposable income” according to the rules of Chapter 13 bankruptcy, specifically using historical data like the standards from 2018. The term “disposable income” in bankruptcy has a specific legal meaning: it’s your gross monthly income minus a set of “allowed” expenses. These expenses are a combination of your actual costs and standardized amounts determined by the IRS. The final calculated amount is critical because it determines the minimum payment you must make to your unsecured creditors each month in a Chapter 13 repayment plan. This calculator is essential for anyone considering a Chapter 13 filing to get a realistic preview of their financial commitment over the three to five-year plan period.

This tool is intended for individuals with regular income who are struggling with debt but have assets they want to protect, such as a home or car. A common misconception is that you can budget your expenses however you like. In reality, the bankruptcy court and trustee use the rigid framework of the Means Test, which dictates expense limits. Using a reliable Chapter 13 Expense Calculator like this one helps demystify the process and provides a clear, data-driven starting point for discussion with a bankruptcy attorney.

Chapter 13 Expense Formula and Mathematical Explanation

The core calculation for determining your disposable income under Chapter 13 is straightforward in principle but complex in its components. The fundamental formula is:

Disposable Income = Current Monthly Income (CMI) – Total Allowed Monthly Expenses

The complexity lies in “Total Allowed Monthly Expenses,” which is not simply what you spend. It’s a sum of several categories, some based on national or local IRS standards from a specific period (like 2018), and some based on your actual, necessary expenses. The primary variables used in this Chapter 13 Expense Calculator are broken down below.

Variable	Meaning	Unit	Typical Range
CMI	Current Monthly Income	USD ($)	$2,000 – $15,000+
H	Household Size	Count	1 – 5+
E_Housing	Allowed Housing & Utility Expense	USD ($)	Based on actual cost up to local caps.
E_National	IRS National Standard Expenses	USD ($)	Varies by household size (e.g., $800 – $2,000 for 2018).
E_Transport	IRS Local Standard Transportation Expense	USD ($)	Varies by location (e.g., $500 – $1,100 for 2018).
E_Health	IRS Standard Health Care Expense	USD ($)	Varies by age and household size.
E_Tax	Actual Tax Withholding	USD ($)	15% – 35% of CMI.
E_Other	Other Secured and Priority Debts	USD ($)	Varies greatly.

Practical Examples (Real-World Use Cases)

Example 1: Single Filer with Moderate Income

Consider a single individual with a gross monthly income of $4,500. Their rent is $1,400, their car payment is $350, and their monthly taxes are $750. Using the Chapter 13 Expense Calculator for 2018 standards:

• Inputs: CMI=$4500, Household=1, Housing=$1400, Car Payment=$350, Taxes=$750.
• Calculation: The calculator applies the 2018 IRS National Standard for food/clothing for one person (e.g., ~$850), the standard transportation operating cost, and the standard healthcare allowance. It adds these to the actual housing, car payment, and tax costs.
• Output: Let’s say total allowed expenses come to $3,900. The disposable income would be $4,500 – $3,900 = $600. This $600 would be the estimated monthly payment to the Chapter 13 trustee.

Example 2: Family of Four with Higher Income

A family of four has a combined gross monthly income of $8,000. Their mortgage is $2,200, they have two car payments totaling $700, and their tax withholding is $1,800. They also have $400 in monthly child care costs.

• Inputs: CMI=$8000, Household=4, Housing=$2200, Car Payment=$700, Taxes=$1800, Other=$400.
• Calculation: The Chapter 13 Expense Calculator uses the higher 2018 IRS standards for a family of four for food, clothing, and healthcare. It adds these to the actual costs for mortgage, car payments, taxes, and child care.
• Output: The total allowed expenses might be calculated at $7,100. Their disposable income would be $8,000 – $7,100 = $900. This amount would be their approximate monthly commitment to the repayment plan. Find out more about the bankruptcy means test to understand the thresholds.

How to Use This Chapter 13 Expense Calculator

Follow these steps to get an accurate estimation of your disposable income:

1. Enter Gross Monthly Income: Input your total pre-tax income, averaged over the past six months.
2. Select Household Size: Choose the number of people in your household. This significantly impacts the standardized expenses.
3. Input Actual Expenses: Fill in your actual monthly costs for housing, car payments, taxes, and other mandatory payments like child support. Be precise.
4. Review the Results: The calculator will instantly display your “Estimated Monthly Disposable Income.” This is the primary result.
5. Analyze the Breakdown: Look at the intermediate values and the expense breakdown table. This shows you exactly how the Chapter 13 Expense Calculator arrived at the final number and which expenses are standardized versus actual. The chart provides a quick visual reference of where your money is allocated.
6. Use for Planning: This result is a powerful estimate of your Chapter 13 plan payment. Use it as a basis for a conversation with a qualified bankruptcy attorney about your options, such as whether you need a Chapter 7 calculator instead.

Key Factors That Affect Chapter 13 Results

• Household Income: This is the starting point. Higher income generally leads to higher disposable income, assuming expenses don’t rise proportionally.
• Household Size: A larger household size directly increases the standardized deductions for food, clothing, and healthcare, which lowers your disposable income.
• Housing Costs: While you deduct your actual mortgage or rent, it’s capped by IRS Local Standards. Excessively high housing costs may not be fully deductible.
• Secured Debt Payments: Payments on secured debts, like car loans, are typically fully deductible. This is a crucial part of the allowable bankruptcy expenses.
• Priority Debts: Payments for taxes, child support, or alimony are considered priority debts and are fully deducted, reducing your disposable income available for general unsecured creditors.
• State of Residence: The IRS Local Standards for housing and transportation vary significantly by state and even county, making your location a key factor. A filer in a high-cost-of-living area will have higher allowable expenses. Knowing about the disposable income calculation is key.

Frequently Asked Questions (FAQ)

Why does this calculator use 2018 standards?

This calculator uses 2018 standards for illustrative and SEO purposes to target specific long-tail keywords. In a real bankruptcy filing, you must use the most current data provided by the U.S. Trustee Program. This tool is for estimation only.

Is the calculated disposable income my exact Chapter 13 payment?

Not necessarily. This Chapter 13 Expense Calculator provides an estimate based on the “disposable income” test. Your final payment could be higher if you have non-exempt assets that must be paid for through the plan (the “best interest of creditors” test). Always consult an attorney.

What if my actual expenses are higher than the IRS standards?

For categories governed by IRS standards (like food and clothing), you are generally limited to that amount, even if you spend more. For other categories, you may be able to claim higher actual expenses if you can prove they are reasonable and necessary.

Do I include credit card payments in my expenses?

No. Payments to general unsecured debts like credit cards and medical bills are not deducted. The disposable income you calculate is the money that will be distributed among those creditors.

How do retirement contributions affect the calculation?

Voluntary retirement contributions are generally not considered a necessary expense and cannot be deducted. However, repayments for loans from your retirement plan may be deductible. Considering a Chapter 13 payment plan can help organize this.

Can I deduct charitable contributions?

Yes, but with limits. You can deduct charitable contributions if you have a history of making them, up to 15% of your gross income.

What happens if my income changes during my Chapter 13 plan?

If your income changes significantly, your plan payment may need to be modified. You must report substantial changes to the bankruptcy trustee.

Does this Chapter 13 Expense Calculator work for business owners?

This calculator is designed for individuals with wage income. If you are self-employed or run a business, calculating your income and business expenses is much more complex and requires a detailed analysis with an attorney.