New York Chapter 13 Payment
Plan Calculator

Chapter 13 bankruptcy in New York allows individuals with regular income to reorganize their debts into a manageable repayment plan lasting three to five years. Unlike Chapter 7, which liquidates non-exempt assets to pay creditors, Chapter 13 lets debtors keep their property — including homes facing foreclosure and vehicles subject to repossession — while catching up on missed payments through a court-supervised plan.

In New York, the median family income for a household of four is approximately $100,248, which is a critical threshold that determines whether a debtor's plan must last three years or five years under the means test.

Because New York has a relatively high median income compared to the national average, many filers in the state earn below the median threshold and qualify for shorter 36-month repayment plans. This can be advantageous because it means debtors pay into the plan for less time before receiving a discharge.

However, above-median earners in New York's metropolitan areas — where salaries tend to be higher — are typically committed to the full 60-month plan duration.

Filing Chapter 13 in New York immediately triggers an automatic stay that halts all collection activities, including foreclosure proceedings, wage garnishments, lawsuits, and creditor phone calls. This breathing room is often the primary reason debtors choose Chapter 13 over informal debt management.

The automatic stay remains in effect throughout the plan unless a creditor successfully motions to lift it — for example, if the debtor falls behind on post-petition mortgage payments. Southern District (Manhattan) and Eastern District (Brooklyn) handle the bulk of New York Chapter 13 filings; local rules vary significantly between districts; New York allows debtors to choose between state and federal exemptions, with state exemptions being more favorable for homeowners.

New York's Chapter 13 cases are handled by standing trustees across four districts: Southern (Manhattan/White Plains), Eastern (Brooklyn/Westbury), Northern (Albany/Syracuse), and Western (Buffalo/Rochester). The Southern and Eastern Districts operate mortgage modification mediation (MMM) programs.

Lien stripping is permitted per Second Circuit authority. Standing trustee fees vary by district (approximately 8–10%).

New York's Chapter 13 completion rate is below the national average in New York City districts, where high living costs make sustained plan payments difficult. The Eastern District (Brooklyn) and Southern District (Manhattan/White Plains) have among the highest Chapter 13 case volumes in the nation.

New York's state income tax (up to 10.9%) creates substantial priority claims.

Chapter 13 plan payments in New York are determined by three overlapping tests, and the debtor must satisfy all of them. The first is the means test, which calculates projected disposable income by subtracting IRS-allowed living expenses and actual secured debt payments from the debtor's current monthly income.

For New York residents, this means test uses the Census Bureau's median income figure of $100,248 for a household of four (adjusted for household size). All projected disposable income over the plan period must be committed to paying unsecured creditors.

The second test is the best interest of creditors test (also called the liquidation test), which requires that unsecured creditors receive at least as much through the Chapter 13 plan as they would in a hypothetical Chapter 7 liquidation. This means the debtor's non-exempt assets are valued, and the plan must pay unsecured creditors at least that amount.

In New York, the available exemptions directly affect this calculation — more generous exemptions mean fewer non-exempt assets and potentially lower required payments to unsecured creditors.

The third test requires that the plan be proposed in good faith. Courts in New York examine the totality of circumstances, including the debtor's income, expenses, and the percentage being paid to unsecured creditors.

Typical minimum monthly payments in New York range from $350–$1,500/month, depending on income level, secured debt obligations, and priority claims. The Chapter 13 trustee's fee of 4–8% is built into the plan payment and taken before distributions to creditors, so the debtor's actual monthly payment includes this administrative cost.

Self-employed debtors and those with irregular income face additional challenges in New York. The standing trustee may require more detailed income documentation, including profit-and-loss statements, bank records, and projections.

Income from a spouse who is not filing — called a non-filing spouse's contribution — can also factor into the means test calculation, particularly in states with higher costs of living where dual incomes are common.

The Bankruptcy Code ties plan duration directly to the debtor's income relative to the state median. In New York, debtors earning below the median income of $100,248 (for a family of four) may propose a plan as short as 36 months, provided it satisfies the best interest of creditors test and pays all required priority and secured claims.

Above-median debtors must commit to a plan lasting the full 60 months — also called the "applicable commitment period." Courts in New York generally enforce this distinction strictly, though the Supreme Court's decision in Hamilton v. Lanning (2010) allows courts to consider known changes in income when calculating the commitment period.

Given New York's higher median income threshold, debtors with moderate earnings may find they qualify as below-median filers, opening the door to a shorter 36-month plan. However, below-median debtors can voluntarily propose a longer plan — up to 60 months — if needed to cure mortgage arrears, pay off a vehicle loan through the plan, or address priority tax debts that must be paid in full.

The flexibility to extend the plan can make monthly payments more affordable.

Regardless of plan length, all Chapter 13 plans in New York must provide for full payment of priority debts — including domestic support obligations (child support and alimony), certain tax debts, and administrative expenses like the trustee's fee. These obligations cannot be reduced or discharged and must be paid over the life of the plan.

Any remaining disposable income after priority and secured claims is distributed pro rata to general unsecured creditors, who often receive pennies on the dollar.

Chapter 13 plans in New York must address three categories of debt: priority, secured, and unsecured. Priority debts are paid first and in full — these include domestic support obligations (child support and alimony arrears), recent income tax debts (generally taxes due within 3 years of filing), and administrative claims including the Chapter 13 trustee's fee of 4–8%.

In New York, failure to remain current on ongoing domestic support obligations during the plan is grounds for dismissal, and the trustee monitors compliance closely.

Secured debts — those backed by collateral like a home mortgage or car loan — receive special treatment in Chapter 13. For a primary residence, Chapter 13 cannot modify the mortgage terms (under the anti-modification provision of 11 U.S.C.

Section 1322(b)(2)), but it can cure pre-petition arrears over the life of the plan while the debtor resumes regular mortgage payments. This is one of the most powerful features of Chapter 13 in New York, allowing homeowners facing foreclosure to save their homes.

In New York, the standing trustee typically requires direct mortgage payments from the debtor to the lender for ongoing payments, with only the arrears cure flowing through the plan.

For vehicles and other personal property securing a loan, Chapter 13 offers the powerful "cramdown" option. If the vehicle was purchased more than 910 days before filing (roughly 2.5 years, known as the "910-day rule" or "hanging paragraph"), the debtor can reduce the secured claim to the vehicle's current market value, often significantly less than the loan balance.

The remaining balance is treated as unsecured debt. The debtor can also reduce the interest rate to a court-determined rate (typically prime plus 1–3% in New York).

For vehicles purchased within 910 days, the full contract balance must be paid through the plan.

Debtors in New York with junior mortgages or home equity lines of credit (HELOCs) may be able to "strip" these liens if the home's value is less than the first mortgage balance — meaning the junior lien is wholly unsecured. This converts the entire second mortgage to unsecured debt within the plan, which often results in the creditor receiving only a fraction of what is owed.

Lien stripping is one of the most significant advantages of Chapter 13 over Chapter 7 for underwater homeowners.

While Chapter 13 provides a broader discharge than Chapter 7, certain debts survive even a completed Chapter 13 plan in New York. Non-dischargeable debts include most student loans (absent a separate adversary proceeding proving undue hardship), domestic support obligations including child support and alimony, criminal restitution and fines, debts arising from fraud or willful injury, and certain tax obligations.

Debtors in New York should understand that these obligations persist after the plan concludes and budget accordingly.

The Chapter 13 "super discharge" historically discharged more types of debt than Chapter 7, but the 2005 BAPCPA amendments significantly narrowed this advantage. Under current law, Chapter 13 no longer discharges debts for willful and malicious injury to property, debts arising from securities fraud, or certain debts incurred in divorce proceedings that would not be dischargeable in Chapter 7.

However, Chapter 13 still discharges some debts that Chapter 7 does not, including certain debts arising from property settlements in divorce and debts from willful and malicious injury to property of a non-governmental entity.

For New York residents with significant tax debts, Chapter 13 can be particularly valuable. While priority tax debts must be paid in full through the plan, older tax debts that have lost priority status (generally those assessed more than 240 days before filing or due more than 3 years before filing with timely returns filed more than 2 years before filing) can be treated as general unsecured claims and potentially discharged.

A New York bankruptcy attorney can analyze which tax debts qualify for discharge and structure the plan accordingly.

After filing a Chapter 13 petition in New York, the debtor must begin making plan payments within 30 days — before the plan is even confirmed by the court. The Section 341 meeting of creditors typically occurs 20 to 50 days after filing, where the standing trustee and any creditors can question the debtor under oath about finances, assets, and the proposed plan.

In New York, the confirmation hearing usually takes place 20 to 45 days after the 341 meeting, depending on the court's calendar and whether objections are filed.

New York's Chapter 13 plan completion rate of approximately 39% is in line with national averages. Roughly 61% of filed plans are dismissed before the debtor completes all payments.

Understanding the reasons for plan failure — job loss, medical emergencies, divorce, vehicle breakdown — can help New York debtors plan for contingencies and increase their chances of success. The standing trustee in New York may object to confirmation if the plan does not meet statutory requirements or is not filed in good faith.

If a confirmed plan becomes unsustainable due to changed circumstances, New York debtors have several options. They can seek a plan modification to adjust payments up or down, convert the case to Chapter 7 (if eligible under the means test), request a voluntary dismissal, or in limited circumstances obtain a "hardship discharge" if the debtor has paid at least as much as creditors would have received in a Chapter 7 liquidation and the inability to complete the plan is due to circumstances beyond the debtor's control (such as permanent disability).

Working with a knowledgeable New York bankruptcy attorney is essential to navigating these options.

Before committing to a Chapter 13 plan, the New York Chapter 7 Means Test Calculator can tell you if you qualify for a full discharge instead. If you proceed with Chapter 13, knowing what you can protect is essential — the New York Bankruptcy Exemption Calculator covers all exemption categories for New York filers.

If your home equity is a key factor, check the New York Homestead Exemption Calculator to understand how much equity New York law shields.