What do unsecured creditors receive in Arizona chapter 13?
Unsecured creditors in a chapter 13 are entitled to receive 100% of your monthly disposable income. Unsecured creditors are owed debts such as credit card debt, medical debt and other debt that does not include any property pledged as collateral. Your monthly disposable income is determined by a formula provided by the bankruptcy law known as “means test”. The formula takes your gross income and reduces it by the costs of necessities such as food, clothing, transportation, household expenses, healthcare expenses, withholdings from your paycheck and some other expenses with the result being your disposable income. So if your disposable income based upon the formula is $500 per month and your chapter 13 plan is for five years than your unsecured creditors will divide $30,000 ($500 x 60mths) among themselves. If your total unsecured debt amount was $50,000 than the $20,000 deficiency that the unsecured creditors did not receive through your chapter 13 plan is discharged and you do not have to pay it.