Is disposable income the same as what is left after my bills?

No. It is a defined legal term, not a household budget figure. Official Form 122C-2 directs Chapter 13 filers to deduct IRS National and Local Standard amounts for certain categories regardless of what they actually spend, using actual expenses only where the form calls for them. The result can be higher or lower than the money you feel you have left.

Does the disposable income figure automatically set my Chapter 13 plan payment?

Not automatically. The projected-disposable-income test at 11 U.S.C. § 1325(b) applies when the trustee or the holder of an allowed unsecured claim objects to confirmation of the plan. Separately, 11 U.S.C. § 1322(a)(1) requires the plan to submit as much future income to the trustee's supervision and control as the plan's execution requires.

Do I have to file Form 122C-2 in every Chapter 13 case?

No. Court guidance explains that Form 122C-2 is filed only if Official Form 122C-1 requires it. Some district instructions state that where income is equal to or less than the median for a household of the same size in the state, the second form is not required. Your district's clerk's office publishes the current filing instructions.

Does disposable income have anything to do with the filing fee?

No — the filing fee is set separately. The Chapter 13 filing fee is $235 (28 U.S.C. § 1930(a)(1)(B)), plus a $78 administrative fee (Bankruptcy Court Miscellaneous Fee Schedule, Item 8). Chapter 7 has a $245 filing fee (28 U.S.C. § 1930(a)(1)(A), (f)(1)), the same $78 administrative fee, and a $15 trustee surcharge (Bankruptcy Court Miscellaneous Fee Schedule, Item 9).

Glossary

Disposable Income

Disposable income is the income a debtor receives that is not reasonably necessary for the support of the debtor and dependents — and, in a business case, for operating the business. Each chapter defines it separately: subchapter V uses 11 U.S.C. § 1191(d), and Chapter 13 uses § 1325(b)(2). It generally matters because it can set what unsecured creditors are paid under a repayment plan.

Key points

Disposable income is income left after expenses the law treats as reasonably necessary — not simply what is left in your bank account at the end of the month.
There is no single definition: § 1191(d) supplies the subchapter V definition and § 1325(b)(2) supplies the Chapter 13 definition.
In Chapter 13, the projected-disposable-income test under § 1325(b) applies when the trustee or an allowed unsecured creditor objects to confirmation.
In Chapter 13 cases, deductions on Official Form 122C-2 come from IRS National and Local Standards, not from what you actually spend on every category.
A Chapter 13 plan must also submit future earnings to the trustee's supervision and control as needed to execute the plan (11 U.S.C. § 1322(a)(1)).

You have probably met this phrase on a bankruptcy form or in a letter from a trustee, and it does not mean what "disposable income" means in ordinary conversation. In bankruptcy it is a defined legal term, and which definition applies depends on the chapter. Here is what it means and why the number matters.

What does disposable income mean in bankruptcy?

In subchapter V of Chapter 11, disposable income means income received by the debtor that is not reasonably necessary to be expended for the maintenance or support of the debtor or a dependent, for a domestic support obligation that first becomes payable after the petition is filed, or for expenditures necessary to continue, preserve, or operate the debtor's business (11 U.S.C. § 1191(d)). Chapter 13 has its own definition at 11 U.S.C. § 1325(b)(2); Chapter 12 has another at 11 U.S.C. § 1225. One district's plain-language guide describes the everyday version this way: what is left from take-home pay after paying for basic necessities such as a mortgage payment or rent, a car payment, utilities, food, insurance, and care for dependents. That description is helpful, but the controlling text is the statute for the chapter you are in, and the two are not identical.

Not reasonably necessary for maintenance or support of the debtor or a dependent
Not needed for a postpetition domestic support obligation
Not needed to continue, preserve, or operate a business the debtor runs

Why does the number matter in a case?

Disposable income is one of the levers that decides what a repayment plan has to pay unsecured creditors. In Chapter 13, the projected-disposable-income test under 11 U.S.C. § 1325(b) is triggered when the trustee or the holder of an allowed unsecured claim objects to confirmation of the plan — it is not an automatic gate in every case. Chapter 12 works the same way structurally: § 1225(b)(1) applies if the trustee or an allowed unsecured creditor objects. In subchapter V, § 1191(c)(2) makes the commitment of projected disposable income part of the "fair and equitable" test when a plan is confirmed over a class's objection. Separately, 11 U.S.C. § 1322(a)(1) requires a Chapter 13 plan to submit as much future income as the plan's execution needs to the trustee's supervision and control.

Where each definition lives
Chapter	Definition	Test provision
Chapter 13	11 U.S.C. § 1325(b)(2)	11 U.S.C. § 1325(b)
Chapter 12	11 U.S.C. § 1225(b)(2)	11 U.S.C. § 1225(b)(1)
Subchapter V	11 U.S.C. § 1191(d)	11 U.S.C. § 1191(c)(2)

How is it calculated in practice?

In a Chapter 13 case the calculation is done on official forms, not by guessing. Official Form 122C-1 reports current monthly income and calculates the commitment period; if that form requires it, Official Form 122C-2, Chapter 13 Calculation of Your Disposable Income, is filed as well. Form 122C-2 instructs filers to use IRS National and Local Standards for certain expense categories and to deduct those standard amounts regardless of actual spending, while later parts of the form use actual expenses where they are higher. Court guidance in some districts notes that if income is equal to or less than the applicable median for a household of that size, the second form is not required. Chapter 7 filers use a different pair of forms, 122A-1 and 122A-2.

Form 122C-1 — current monthly income and commitment period
Form 122C-2 — the disposable income calculation itself
Schedules I and J report actual monthly income and expenses separately

What do people get wrong about disposable income?

The most common mistake is assuming it means whatever is left in the account after the bills clear. The forms use standardized IRS expense figures for several categories, so a filer's calculated disposable income can differ — in either direction — from the money they actually feel they have. A second mistake is treating one chapter's rule as universal: § 1325 governs Chapter 13, § 1191 governs subchapter V, and Chapter 7's abuse analysis under 11 U.S.C. § 707(b) is a different calculation again. A third is assuming the figure automatically controls the plan payment; in Chapter 13 the § 1325(b) test is raised by an objection from the trustee or an allowed unsecured creditor. Median income figures and expense standards vary by state and household size, so check your state page rather than a national average.

Standardized IRS expense amounts are used for some categories regardless of actual spending
The applicable definition depends on the chapter
Filing fees are separate from this calculation and are set by the fee schedules

Frequently asked questions

Is disposable income the same as what is left after my bills?: No. It is a defined legal term, not a household budget figure. Official Form 122C-2 directs Chapter 13 filers to deduct IRS National and Local Standard amounts for certain categories regardless of what they actually spend, using actual expenses only where the form calls for them. The result can be higher or lower than the money you feel you have left.
Does the disposable income figure automatically set my Chapter 13 plan payment?: Not automatically. The projected-disposable-income test at 11 U.S.C. § 1325(b) applies when the trustee or the holder of an allowed unsecured claim objects to confirmation of the plan. Separately, 11 U.S.C. § 1322(a)(1) requires the plan to submit as much future income to the trustee's supervision and control as the plan's execution requires.
Do I have to file Form 122C-2 in every Chapter 13 case?: No. Court guidance explains that Form 122C-2 is filed only if Official Form 122C-1 requires it. Some district instructions state that where income is equal to or less than the median for a household of the same size in the state, the second form is not required. Your district's clerk's office publishes the current filing instructions.
Does disposable income have anything to do with the filing fee?: No — the filing fee is set separately. The Chapter 13 filing fee is $235 (28 U.S.C. § 1930(a)(1)(B)), plus a $78 administrative fee (Bankruptcy Court Miscellaneous Fee Schedule, Item 8). Chapter 7 has a $245 filing fee (28 U.S.C. § 1930(a)(1)(A), (f)(1)), the same $78 administrative fee, and a $15 trustee surcharge (Bankruptcy Court Miscellaneous Fee Schedule, Item 9).

Sources

11 U.S.C. § 1191 — Confirmation of plan (subchapter V)
11 U.S.C. § 1325 — Confirmation of plan (chapter 13) · official source
11 U.S.C. § 1322 — Contents of plan · official source
11 U.S.C. § 1225 — Confirmation of plan (chapter 12)
11 U.S.C. § 707 — Dismissal of a case or conversion to a case under chapter 11 or 13 · official source
Bankr. E.D. La. official guidance — Chapter 13 Form Packet
Bankr. S.D. Ind. official page — Chapter 13 Calculation of Disposable Income
Bankr. S.D. Iowa official guidance — Instructions - Bankruptcy Forms for Individuals
U.S. Bankr. Ct. D. Ariz., Choosing Your Chapter: What can Bankruptcy do for you? What will it do to you?
Bankruptcy Court Miscellaneous Fee Schedule, Item 8
Bankruptcy Court Miscellaneous Fee Schedule, Item 9
28 U.S.C. § 1930(a)(1)(B) · official source
28 U.S.C. § 1930(a)(1)(A), (f)(1) · official source

By Antonio G. Jimenez, Esq. · Florida Bar No. 21022

Sources verified July 28, 2026 · How we verify

Every figure on this page is drawn from a primary legal source and checked against our canonical legal database before publication. Bankruptcy.law is not a law firm and does not provide legal advice.