Allowable living expenses in Chapter 13 bankruptcy are the costs subtracted from your income to figure out how much disposable income you have left for creditors each month. That leftover amount sets the minimum you must pay into your repayment plan for the next three to five years. What counts as an expense, and whether you use standardized figures or your real bills, depends on how your income compares to your state’s median.
Above-Median or Below-Median Changes Everything
Before you can list a single expense, you compare your annualized current monthly income to the median family income in your state for a household your size.
If you fall below the median, the court applies a flexible “reasonably necessary” standard. You and the trustee work from your actual household budget, and the judge decides what’s reasonable. Your commitment period is three years.
If you’re at or above the median, you complete Form 122C-2 and calculate expenses using standardized figures published by the IRS and the U.S. Trustee Program, not your real spending.1Office of the Law Revision Counsel. 11 USC 1325 – Confirmation of Plan Your plan runs five years.2United States Courts. Chapter 13 Bankruptcy Basics
The categories below describe the standardized framework above-median debtors face. Below-median debtors follow the same general logic but with more room to argue their actual numbers.
National Standards: Flat Allowances, No Receipts
National Standards are uniform monthly amounts covering food, housekeeping supplies, clothing, personal care products, and a miscellaneous category. They come from Bureau of Labor Statistics consumer spending data and vary only by household size.3U.S. Department of Justice. Means Testing – November 2025 You get the full amount whether or not you actually spend it, and no receipts are required.
For cases filed under the standards effective through early 2026, the combined monthly allowance is:
- One person: $839
- Two people: $1,481
- Three people: $1,753
- Four people: $2,129
- Each additional person: add $394
Figures update periodically, so check the U.S. Trustee Program site for what’s in effect when you file.4Internal Revenue Service. Allowable Living Expenses National Standards
A separate National Standard covers out-of-pocket health care such as prescriptions, medical supplies, and co-pays: $84 per month for each household member under 65, and $149 for anyone 65 or older. This is on top of what you pay for health insurance, which is claimed separately as an actual cost.5Internal Revenue Service. Allowable Living Expenses Health Care Standards
Local Standards: Housing and Transportation
Housing and Utilities
Housing allowances vary by county and household size. The U.S. Trustee Program publishes an allowed figure for each county that covers rent or mortgage payments, property taxes, insurance, maintenance, gas, electric, water, garbage, phone, internet, and cable.3U.S. Department of Justice. Means Testing – November 2025
The allowance is not a blank check. If your actual housing costs run well below the local standard, the trustee may push you to use the lower number. If your costs exceed the standard, the overage generally isn’t deductible unless you can show special circumstances.
Transportation
Transportation splits into two pieces.
Operating costs cover fuel, insurance, maintenance, registration, parking, and tolls. The monthly allowance varies by Census region and metro area, running from about $219 in Anchorage to $401 in New York City.6Internal Revenue Service. Allowable Transportation Expenses
Ownership costs are a separate nationwide allowance for a car loan or lease payment: $662 per month for one vehicle and $1,324 for two. You can only claim ownership if you actually have a loan or lease. Own your car outright, and you get operating costs but not ownership. For both pieces, the deduction is capped at the lesser of the standard or what you actually spend.3U.S. Department of Justice. Means Testing – November 2025 Up to two vehicles are covered, though a single filer without dependents is typically limited to one.
Actual-Cost Categories on Form 122C-2
Some expenses don’t fit the standardized buckets. On these lines you claim what you actually pay, and the trustee will want documentation.7United States Courts. Official Form 122C-2 – Chapter 13 Calculation of Your Disposable Income
- Taxes: federal, state, and local income taxes, Social Security, and Medicare. If you typically get a refund, you divide the expected refund by twelve and subtract that from your monthly withholding.
- Mandatory payroll deductions: required retirement contributions, union dues, and employer-required uniform costs.
- Health insurance premiums: what you actually pay to cover yourself and your dependents.
- Court-ordered payments: current child support, spousal support, or other required payments. Past-due support is handled separately as a priority debt in the plan itself.
- Childcare: daycare, babysitting, preschool, and similar costs. Elementary and secondary school tuition does not count here.
- Education expenses: only if the education is required as a condition of your employment, or is for a disabled dependent child who lacks access to public alternatives.
- Term life insurance: monthly premiums on your own term life policy, or a joint filer’s spouse’s term policy.
- Additional health care costs: unreimbursed medical spending above the out-of-pocket standard.
Expect the trustee to ask for pay stubs, insurance statements, receipts, or copies of court orders. Undocumented claims get cut.
How the Expense Total Becomes Your Plan Payment
Once every allowable expense is tallied, the arithmetic is simple. Current monthly income minus total allowable expenses equals monthly disposable income. That number is the minimum you must pay into the plan each month for the duration of your commitment period.1Office of the Law Revision Counsel. 11 USC 1325 – Confirmation of Plan
Two other tests can push your payment higher. Unsecured creditors must receive at least what they would have gotten if you had filed Chapter 7 and your nonexempt assets were liquidated. Priority debts such as recent tax obligations and past-due support must be paid in full over the life of the plan.8Office of the Law Revision Counsel. 11 USC 1322 – Contents of Plan
One expense that catches filers by surprise is the trustee’s fee. The Chapter 13 trustee takes a percentage of every dollar that flows through the plan, up to a statutory maximum of 10 percent, with the actual percentage set by district and fiscal year.9Office of the Law Revision Counsel. 28 USC 586 – Duties; Supervision by Attorney General Your total payment has to cover that cut and still leave enough for creditors.
When You Can Claim More Than the Standard
IRS standards aren’t the final word if your actual necessary expenses run higher. You can argue for larger deductions by showing “special circumstances” that leave you no reasonable alternative. The statute names two examples: a serious medical condition, and a call or order to active military duty. Those aren’t the only qualifying situations, but they signal how high the bar sits. Routine budget overruns don’t clear it.10Office of the Law Revision Counsel. 11 USC 707 – Dismissal of a Case or Conversion
To make the argument, you itemize each additional expense, document the cost, and submit a written explanation of why the expense is necessary and unavoidable. Everything is sworn under oath. Judges scrutinize these claims closely, and unsupported requests get denied.
Adjusting Expenses After Your Plan Is Confirmed
A three-to-five-year plan rarely tracks real life. If your expenses change significantly after confirmation, you, the trustee, or an unsecured creditor can ask the court to modify the plan at any point before payments are complete. A modification can raise or lower payments, extend or shorten the timeline, or account for a new health insurance cost. The modified plan still has to meet every original legal requirement, and total duration cannot exceed five years from your first payment.11Office of the Law Revision Counsel. 11 USC 1329 – Modification of Plan After Confirmation
If things get bad enough that no realistic modification would let you finish, you may qualify for a hardship discharge. The court can discharge remaining unsecured debts if the failure to complete payments is due to circumstances beyond your control, unsecured creditors have already received at least their Chapter 7 equivalent, and further modification isn’t workable.12Office of the Law Revision Counsel. 11 USC 1328 – Discharge A hardship discharge is narrower than the regular one. Nonpriority unsecured debts like credit cards and medical bills go away; priority obligations such as tax debts and support arrears survive.
The Cost of Inflating Expenses
Accuracy on the forms is not optional. Overstating what you spend or inventing costs you don’t have is bankruptcy fraud. Making a false oath or filing a false statement in a bankruptcy case is a federal crime carrying up to five years in prison, a fine, or both.13Office of the Law Revision Counsel. 18 USC 152 – Concealment of Assets; False Oaths and Claims; Bribery
Even short of prosecution, misrepresenting expenses can lead to dismissal, denial of discharge, or both. A dismissed case strips you of the automatic stay, and a denied discharge means you still owe every dollar. Trustees cross-check claimed expenses against bank statements, pay stubs, and tax returns. Getting caught leaves you worse off than if you had never filed.