A Chapter 13 payment is the higher of three numbers: what's left in your budget each month after allowed expenses, what unsecured creditors would have received in a Chapter 7 liquidation, and what secured and priority creditors have to be paid in full over the plan. The trustee runs all three. Your monthly payment is whichever one wins, plus the trustee's percentage.
Test one: disposable income
Start with the six months of income before filing, averaged, and compare it to the California median for your household size (currently $116,541 for three people, $139,071 for four, in cases filed on or after April 1, 2026). Below median, your plan runs 36 months and your budget is whatever your real, reasonable expenses leave over. Above median, the plan runs 60 months and the expenses come partly from IRS standards rather than your actual spending, which is where the arguments start.
The trustee's office in Los Angeles looks hard at a few lines. A $900 car payment on a $60,000 income. Private school tuition. Tithing above what you've historically given. Charitable giving up to 15% of income is protected by statute; a new $500 a month church contribution that began the month before filing is not. Cell phone bills for four adults. The office will ask, and the plan payment goes up by whatever they knock off the expense side.
Test two: what a Chapter 7 would have paid
Unsecured creditors must receive at least what they'd get if a trustee sold your non-exempt property today. This is the liquidation test, and it's the one that catches homeowners.
Say your house in Culver City has $820,000 of equity. The Los Angeles County homestead exemption for 2026 is $743,459. The uncovered $76,541, less the roughly 8% a Chapter 7 trustee would spend selling, is money the plan has to send to unsecured creditors over its life. Around $1,170 a month over 60 months, added to everything else, even if your budget says you have $400. Which brings us to the honest part: the liquidation test is where we sometimes tell people that Chapter 13 will not save the house, and that a sale on their own terms beats a plan they can't fund.
Test three: secured and priority claims
Certain debts have to be paid in full through the plan, no matter what the budget says. Mortgage arrears, if you're keeping the house. Car loans, at least to the value of the car. Priority taxes, the recent ones. Past-due child support. The balance of the attorney fee. Each of those gets divided by the number of plan months, and that sum is a floor the payment can't drop below.
This test is the one people can actually do something about. Surrender the second car and its $14,000 balance leaves the plan. Sell the boat. Get the IRS to accept that a year is dischargeable. The Chapter 13 overview goes through each of those levers.
A worked example
A family of three in Torrance. Income puts them above median, so the plan runs 60 months. They're $18,000 behind on the mortgage, they owe $12,000 on a 2020 Honda bought four years ago, the IRS wants $6,000 for 2024, and they carry $40,000 in cards. They've paid $1,500 of the attorney fee before filing. They have $9,000 of non-exempt equity in a paid-off second vehicle.
| Plan component | Total | Per month (60 mo.) |
|---|---|---|
| Mortgage arrears cure | $18,000 | $300 |
| Honda, crammed down to $12,000 at 9% | $14,940 | $249 |
| IRS priority claim, no interest | $6,000 | $100 |
| Attorney fee balance | $5,500 | $92 |
| Unsecured creditors (liquidation test) | $9,000 | $150 |
| Subtotal before trustee fee | $53,440 | $891 |
| Trustee's percentage (illustrated at 8%) | roughly $4,650 | roughly $78 |
| Plan payment | about $969 |
Their disposable income test came out at $640 a month. It didn't matter. The secured and priority floor was higher, so $969 it is, and the $40,000 of card debt gets $9,000 over five years and the rest is discharged. Because the trustee's percentage in the Central District moves from year to year, we use the current figure when we draft.
Note that the plan payment is separate from the regular mortgage payment, which they keep paying directly to the lender each month.
How the payment actually gets made
The first payment is due 30 days after filing, before the plan is confirmed, before anyone has told you it's approved. Central District trustees expect it by wage order in most cases, meaning your employer deducts it from your paycheck and sends it to the trustee. People dislike this on principle and it's the single biggest reason plans succeed. You can't miss what you never see.
Self-employed clients and people whose employers can't handle a wage order pay through TFS or by cashier's check. We set it up before the case is filed, not after.
Where the estimate on the first call comes from
By the end of a video consultation, Naomi can usually give a range within a couple hundred dollars a month. The range narrows once we have the mortgage lender's exact arrears figure, a payoff on the car, and IRS transcripts. It is an estimate until the trustee's office reviews the plan, and in a small share of cases the trustee's view of an expense moves the number.
What we won't do is quote a low payment to get a case signed and let the trustee raise it at confirmation. A plan built on a number you can't pay is a dismissal with extra steps. The cost page shows how the attorney fee inside the plan is structured.
the budget people bring me is never their real budget. It's the one they wish they had. So we go through twelve months of bank statements line by line, on screen, and count what actually went out for groceries and gas and the kids. The number is always higher than the one they wrote down. That's fine. The trustee's office has seen the same statements and would rather confirm a plan built on $1,100 of groceries than one built on $600 that fails in month seven.
Questions people ask about this
Can my Chapter 13 payment change during the plan?
Yes, in both directions. If your income drops, we can move to modify the plan. If it rises significantly, the trustee can move to raise the payment. Bonuses and large tax refunds during the plan are the usual triggers.
Does the plan payment include my mortgage?
Usually not in the Central District. You keep paying the regular mortgage payment directly to the lender. The plan payment covers the arrears, the trustee's fee, and everything else. Both have to be paid every month.
What percentage do unsecured creditors get?
Anywhere from nothing to 100%. It depends on the three tests, not on a rule of thumb. Many plans in Los Angeles pay unsecured creditors somewhere between 5% and 30%, and some pay zero because every dollar of the payment goes to the mortgage cure and the car.
Can I pay the plan off early?
Only if you pay unsecured creditors in full. Otherwise, paying off early just means the trustee asks where the extra money came from and whether the plan should pay more. A plan that pays 100% can be paid off whenever you have the funds.
What if I get a raise in year two?
Tell us. A modest raise usually changes nothing. A large one, or a new job at double the salary, will likely lead to a modification. The trustee reviews the tax returns you send each year and will notice.
Talk it through with the attorney
Bring your last two pay stubs, your mortgage statement and a rough list of debts to a free video consultation, and Naomi will walk through the three tests with you on screen and give you a monthly range before you hang up.