In a Chapter 13 bankruptcy, your monthly payment to the court towards your outstanding debt is decided based on your income and the monthly living expenses the court deems allowable. Although you can logically guess at some living expenses, like housing, others might come as a surprise.
Food and Clothing
Expenses for food, clothing, household supplies, personal care products and other miscellaneous items can be counted as a living expense under your Chapter 13 paperwork. However, the allowable amounts for these expenses are based on the Internal Revenue Service's National Standards, not your actual expenses. As of January 2010, the allowable total expense amount for these items for a family of four was $1,370 a month.
Housing and Utilities
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Based on IRS local standards, not national standards, allowable housing and utility expenses are figured on state and county amounts and family size, not your actual expenses. Due to regional differences, standards vary by location and can range anywhere from around $700 a month to several thousand dollars a month.
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Transportation expenses, including bus passes, car payments, car insurance, gas and parking expenses, are typically considered allowable expenses due to the necessity of travel for employment. However, the amounts for transportation expenses are based on local standards which vary by state, county or metropolitan area. Typically, the bankruptcy court will only allow transportation expenses for one car per individual filing.
Other Allowable Expenses
The bankruptcy court allows certain other living expenses to be considered necessary to your continued financial and personal well-being. These expenses include: taxes, mandatory payroll deductions, life insurance, court-ordered payments, child care, health care, telecommunication services (like a cell phone), and educational expenses necessary for employment or for a mentally or physically challenged child.