How a Chapter 13 Payment Is Calculated in New York

Chapter 13 works on a house because of one provision. Under 11 U.S.C. § 1322(b)(5), a plan may cure a default within a reasonable time while maintaining payments on a debt whose final payment comes due after the plan ends. A 30-year mortgage is exactly that: the arrears go through the plan, the regular payment resumes.

There are two payments, and only one goes to the trustee. The trustee payment generally carries the mortgage arrears, other secured and priority debts the plan pays, whatever the plan owes unsecured creditors, the Chapter 13 trustee's percentage fee (currently [CHAPTER 13 TRUSTEE PERCENTAGE FEE]), and your attorney's fee — largely paid out of plan payments, not in cash before filing.

The mortgage payment continues alongside it, unchanged. Section 1322(b)(2) bars a plan from modifying the rights of a creditor whose claim is secured only by the debtor's principal residence, so the rate, balance and payment stay as written. A narrow exception at § 1322(c)(2) covers loans maturing before the plan ends.

The arrears figure is not a guess. It is what the servicer files: missed payments, escrow shortfall, late fees and the lender's foreclosure attorney fees and costs. Divide it by the plan months and you have the core of the trustee payment: $30,000 over 60 months is roughly $500, before anything else.

Section 1322(d) sets the term. If your current monthly income, annualized, is at or above the applicable New York median family income, the plan may not exceed five years. Below median, it runs three years unless the court approves a longer period for cause — never beyond five.

For cases filed on or after April 1, 2026, the New York median family income figures are $73,272 for one earner, $92,902 for a household of two, $115,579 for three and $139,040 for four, adding $11,100 for each additional person. What governs is the figure in effect on your filing date.

Watch what the term does to the monthly number, because it runs opposite to intuition. The same $30,000 in arrears is about $500 a month over 60 months and about $833 over 36. A below-median household, on the shorter default term, can face the higher payment.

This is the most common error in this niche. The means test lives in 11 U.S.C. § 707(b), which lets a court dismiss a Chapter 7 case filed by someone whose debts are primarily consumer debts if granting relief would be an abuse. It is a Chapter 7 abuse screen — not a Chapter 13 eligibility rule, and not a Chapter 13 payment.

The § 707(b)(2)(A)(i) formula presumes abuse where current monthly income, reduced by statutory allowances and multiplied by 60, is not less than the lesser of two ceilings: the greater of 25 percent of nonpriority unsecured claims or $10,275, or else $17,150. If annualized income is at or below the state median, §§ 707(b)(6) and (b)(7) close off means-test motions altogether. Those figures took effect April 1, 2025 and adjust again April 1, 2028.

Chapter 13 eligibility is a different statute. Section 109(e) requires an individual with regular income and caps debts at under $526,700 unsecured and under $1,580,125 secured, effective April 1, 2025. Mortgage debt counts toward the secured cap, a live question at Nassau, Suffolk, Brooklyn and Queens price levels. In Chapter 13 the median-income comparison does something else again: under §§ 1322(d) and 1325(b) it sets plan length and the disposable income you must commit, not whether you may file.

Most tools sold as a "Chapter 13 calculator" run the § 707(b) means-test worksheet, which answers a Chapter 7 question. Even careful ones miss the inputs that decide the payment.

• Your actual arrears. That comes from the servicer's filing, not from counting missed payments. In New York, once a Judgment of Foreclosure and Sale is entered the balance carries accrued interest, attorney fees, costs and referee fees, so the cure number grows.
• Whether a second lien can come off. Under In re Pond, 252 F.3d 122 (2d Cir. 2001), a junior mortgage can be stripped to unsecured in Chapter 13 only if it is wholly unsecured after the first mortgage. A dollar in the money and it stays — a valuation question, not a slider.
• Both payments together. Calculators quote a trustee payment and quietly drop the ongoing mortgage payment, the trustee's commission, and the attorney fees funded through the plan.
• Dates. Median income tables change regularly, the § 104 dollar amounts adjust April 1, 2028, and the New York homestead exemption — $204,825 in Nassau, Suffolk, Kings, Queens, Bronx and New York counties since April 1, 2024 — runs on a three-year cycle. A calculator with no effective date is telling you nothing.

Ask five questions about any number you are handed.

• Can you pay both obligations every month for the whole term? Trustee payment plus resumed mortgage payment. Not in a good month — in an ordinary one.
• Can you start in 30 days? Section 1326(a)(1) requires payments to begin no later than 30 days after the plan is filed or the order for relief, whichever is earlier — before any judge has confirmed anything.
• What happens the first month you miss the mortgage? Falling behind on the ongoing payment is serious even if trustee payments are current: it is cause for stay relief under § 362(d)(1) for lack of adequate protection, and § 362(e) puts that motion on a 30-day track.
• What does a dismissal cost? Under § 362(c)(2)(B) the stay ends the moment the case is dismissed, and you return to the New York foreclosure with arrears larger than when you started.
• What is not in the budget yet? The Chapter 13 filing fee is $313, there is no fee waiver in Chapter 13, and Rule 1006(b) allows at most four installments within 120 days while barring any payment to your attorney until the fee is paid in full.

Then weigh it against outcomes. In an analysis of federal court data covering 123,185 Chapter 13 cases closed between 2010 and 2016, 38.8 percent of cases filed completed a plan; a trustee survey put completion near 59 percent of cases confirmed. Four things knowable on day one predicted failure: no attorney (2.3 percent completed), filing solo rather than jointly (32.9 against 51.0 percent), a prior bankruptcy (22.9 percent), and not paying the filing fee in full at filing (24.8 percent).

New York is a judicial foreclosure state, worth pricing before you price a plan. A lender in Nassau, Suffolk, Queens, Brooklyn, the Bronx or Manhattan cannot sell your home without suing you and obtaining a judgment. The servicer must first send the RPAPL 1304 ninety-day notice, and strict compliance is a condition precedent — failure results in dismissal. CPLR 3408 then requires a settlement conference within sixty days of the filing of proof of service, with both sides obliged to negotiate in good faith. A missed answer deadline may not be the end either: CPLR 3408(m) lets a defendant who appears at that conference answer within thirty days, with no substantive defenses deemed waived.

That runway is where foreclosure defense operates and where a loan modification is negotiated. Fannie Mae's Flex Modification targets roughly a 20 percent reduction in principal and interest; FHA's permanent loss mitigation options, which servicers have had to offer since February 2, 2026, target about 25 percent. Where a modification would raise the payment, a repayment plan may fit better. Where keeping the house is not realistic, a short sale can end the foreclosure on negotiated terms rather than at auction — though any shortfall is not forgiven automatically. A release of personal liability has to be written into the lender's approval letter; a release of the lien alone does not release the debt.

This office does not file bankruptcy petitions. If Chapter 13 is the right tool, speak with a bankruptcy attorney, and do it well before any scheduled auction. What this firm does is the rest of the problem: standing with you at every court proceeding and negotiating directly with the lender. This page is general information, not advice about your case. Consultations are free — call 516-719-4144 or reach the office through the contact page.

Does the means test decide whether I can file Chapter 13?

No. The means test is 11 U.S.C. Section 707(b), a Chapter 7 abuse screen that applies to people whose debts are primarily consumer debts. Chapter 13 eligibility comes from Section 109(e): you need regular income, and your debts must stay under $526,700 unsecured and $1,580,125 secured, effective April 1, 2025. In Chapter 13 the median-income comparison sets plan length and disposable-income commitment instead.

Will Chapter 13 lower my monthly mortgage payment?

No. Section 1322(b)(2) prohibits a plan from modifying the rights of a creditor whose claim is secured only by your principal residence, so the interest rate, principal balance and regular monthly payment stay exactly as written. What a plan restructures is the arrears — missed payments, escrow shortfall, late fees and the lender's foreclosure costs — spread across the plan term. A narrow exception at Section 1322(c)(2) covers loans maturing before the plan ends.

Is my Chapter 13 plan three years or five years?

Section 1322(d) ties it to income. At or above the applicable New York median family income, the plan cannot exceed five years. Below median, it runs three years unless the court approves a longer period for cause, and never beyond five. Counterintuitively, the shorter term produces a higher monthly payment for the same arrears, which is why some below-median filers ask for a longer plan.

Can I get the Chapter 13 filing fee waived?

No. The full fee waiver exists only in Chapter 7, and only where income is under 150 percent of the poverty line and the filer cannot pay in installments. The Chapter 13 fee is $313. Installments are available in every chapter — at most four, with everything paid within 120 days — but Rule 1006(b) bars any payment to your attorney until the filing fee is paid in full.

What happens if I fall behind after the plan starts?

Two separate failures matter. Missing trustee payments risks dismissal, and under Section 362(c)(2)(B) the automatic stay ends the moment a case is dismissed, returning you to the foreclosure with larger arrears than before. Missing the ongoing mortgage payment is independently serious: it is cause for stay relief under Section 362(d)(1) for lack of adequate protection, and Section 362(e) puts that motion on a 30-day track.