Chapter 13 bankruptcy payments in Indiana are built from your disposable income, your priority debts, and what your creditors would have received in a Chapter 7 liquidation — whichever of those three figures is highest sets your floor. On top of that number, your plan has to absorb the trustee’s fee of up to 10 percent, your attorney’s fee if it’s paid through the plan, and any mortgage or car-loan arrears you’re curing. The payment then runs for either three or five years depending on where your household income falls against Indiana’s median.
What Sets The Monthly Amount
Three tests work together under federal law, and whichever produces the largest payment wins.
The disposable income test is the central one. If the trustee or a creditor objects to your plan, you must commit all of your projected disposable income for the plan’s full length.1Office of the Law Revision Counsel. 11 US Code 1325 – Confirmation of Plan Disposable income is your current monthly income minus what you reasonably need for living expenses, support of dependents, and any domestic support obligations that come due after filing.
The second test requires that priority debts be paid in full. Back child support, recent income taxes, and certain other government claims cannot be discounted; they must be paid dollar-for-dollar across the life of the plan.2Office of the Law Revision Counsel. 11 USC 1322 – Contents of Plan
The third is the best-interest-of-creditors test. Your unsecured creditors must receive at least as much through the plan as they would have in a Chapter 7 sale of your non-exempt assets.3Office of the Law Revision Counsel. 11 USC 1325 – Confirmation of Plan If you have real equity in a home or other property, this test alone can push your payment above what disposable income would call for.
What Gets Added To The Creditor Payment
The number creditors need is only part of what you actually send the trustee each month. Three other components sit on top.
The Chapter 13 standing trustee collects a percentage fee, capped at 10 percent of all payments, to administer your case.4Office of the Law Revision Counsel. 28 USC 586 – Duties; Supervision by Attorney General On a $500 plan payment, roughly $50 goes to the trustee before creditors see anything. People routinely forget this slice when estimating what Chapter 13 will cost them.
Your attorney’s fee is usually paid through the plan rather than up front. The lawyer typically takes a small retainer at filing and receives the balance from the trustee each month, which means a portion of what you pay every month is going to your own counsel.
Secured debts and arrears are folded in as well. If you’re behind on your mortgage, the plan lets you cure the arrears over its full length while you keep making ongoing mortgage payments. Car loans can sometimes be restructured through the plan, and if you’ve owned the vehicle more than 910 days, the court can reduce the secured portion of the claim to the vehicle’s current value. All of this stacks on top of the creditor payment the three tests produce.
Three Years Or Five? Indiana’s Median Income
How long you make payments — and therefore how your total debt obligation spreads out month to month — depends on your household income relative to Indiana’s median. The U.S. Trustee Program publishes the thresholds using Census Bureau data. Current figures for Indiana:
- 1-person household: $63,531
- 2-person household: $78,886
- 3-person household: $96,030
- 4-person household: $112,796
For households larger than four, add $925 per month for each additional person.5U.S. Trustee Program. Census Bureau Median Family Income By Family Size
Below the median, your plan runs three years unless the court approves a longer period for good cause. At or above the median, you’re locked into five years.2Office of the Law Revision Counsel. 11 USC 1322 – Contents of Plan Five years is the absolute cap. A plan can end sooner only if you pay 100 percent of allowed claims, which is uncommon.
The income comparison uses your average monthly income over the six months before filing, not your most recent paycheck. A heavy stretch of overtime half a year ago can push you above the median even if your current pay is lower, which means a longer plan and a different monthly math.
Filing Fee And Attorney Fee In Indiana
The federal court filing fee for Chapter 13 is $313. You can pay it in installments with the court’s permission.
Attorney fees in Indiana follow a “presumed reasonable” or “no-look” structure. In the Southern District of Indiana, the presumed reasonable fee for cases filed on or after December 1, 2025 is $5,000.6United States Bankruptcy Court. General Order 25-0001 – Increase of the Chapter 13 Presumed Reasonable Fee The Northern District sets its own fee amount, which may differ. An attorney can charge above the no-look amount but must get court approval with detailed billing records.
When The First Payment Is Due
Federal law requires you to begin payments within 30 days of filing your plan or the date the case is opened, whichever comes first — before the court has confirmed the plan.7Office of the Law Revision Counsel. 11 USC 1326 – Payments The trustee holds those pre-confirmation payments and distributes them once the plan is approved. If the plan isn’t confirmed and the case is dismissed, you get the money back minus administrative costs.
During the pre-confirmation period, you may also need to make “adequate protection” payments directly to secured creditors holding claims on personal property such as your car. Those amounts are credited against your plan obligation.7Office of the Law Revision Counsel. 11 USC 1326 – Payments
How You Actually Pay The Trustee
Indiana has two federal judicial districts, each with its own standing Chapter 13 trustees. The method depends on your district and your employment situation.
Wage Assignment Orders
In many Indiana cases, the trustee requests a wage assignment order directing your employer to deduct the plan payment from your paycheck and send it directly to the trustee.8United States Bankruptcy Court. B-3070-1 Wage Assignment Orders in Chapter 13 Cases It’s the most reliable method because it removes the manual step. The trustee can request this order at any point in the case.
Online And Manual Payments
If you’re self-employed or a wage order isn’t practical, the trustee’s online payment system takes transfers from a checking or savings account. In the Southern District, debit cards aren’t accepted, there’s a $2.00 processing fee per transaction, and payments made before 5:00 p.m. are debited the same day. You can also mail cashier’s checks or money orders to the trustee’s lockbox. If an electronic payment bounces, you lose online access for the rest of the case and must switch to cashier’s checks or money orders permanently.
Some trustees, particularly in the Northern District, use the TFS Bill Pay system for bank-account transfers.9Office of the Chapter 13 Standing Trustee. Payments You can split a monthly obligation into smaller transfers, but the full amount still has to arrive by the monthly deadline.
What A Missed Payment Costs And How To Adjust
Missed payments are the single most common reason Chapter 13 cases fail. The trustee can move to dismiss, and if you don’t catch up or respond, the case gets thrown out. The automatic stay disappears, creditors resume collection, and funds that have already been distributed stay with creditors.
Most trustees give a short window to cure the shortfall before pushing for dismissal. If a dismissal order is entered, you can move to vacate it by showing the shortfall has been corrected, though courts vary in how willing they are to grant that relief.
Modifying The Plan
If your finances genuinely change — a job loss, a medical emergency, reduced hours — you aren’t stuck with the original payment. You, the trustee, or a creditor can seek modification at any time after confirmation. Modifications can raise or lower payments, extend or shorten the term within the five-year cap, or adjust distributions to specific creditors.10Office of the Law Revision Counsel. 11 USC 1329 – Modification of Plan After Confirmation A modification hearing is a far better outcome than letting the case collapse.
Converting To Chapter 7
If no reasonable modification can save the plan, you have the right to convert to Chapter 7 at any time. Conversion can wipe out remaining dischargeable debts, but non-exempt assets could be liquidated. You can only convert if you haven’t received a bankruptcy discharge within the previous eight years and can pass the Chapter 7 means test. If the trustee believes you can afford to pay and are simply choosing not to, the court may dismiss outright rather than allow conversion.
Tax Refunds And Raises During The Plan
The monthly payment isn’t the end of what the plan can take. Most Chapter 13 trustees require you to turn over all or part of your federal tax refund each year. The reasoning is that a large refund means your withholding exceeded what you actually owed, and that excess belongs to creditors. Some plans let you keep small refunds, but anything substantial will likely be claimed. You must report every refund, and hiding one can mean dismissal or a denied discharge.
Income increases work the same way. You’re required to provide your tax returns to the trustee each year, and a meaningful raise can prompt the trustee to move for higher payments. If your unsecured creditors are already being paid in full, more income changes nothing. If they’re receiving less than 100 percent, the trustee has every reason to capture the additional earnings. A one-time bonus might trigger a single extra payment; a permanent raise could lead to a full modification that extends the plan to the five-year maximum.