In a Chapter 13 bankruptcy, there are many legal terms that can be difficult to understand if you aren’t familiar with the process. One of the most common terms associated with a Chapter 13 bankruptcy case is “feasibility.” This term relates to the “feasibility requirement,” meaning demonstrating the ability to follow the Chapter 13 payment plan.
Understanding “Feasibility” in Chapter 13 Bankruptcy
The reason this term is confusing is because the feasibility requirement actually refers to two different things in your Chapter 13 Texas bankruptcy.
- The debtor’s ability to adhere to the proposed plan. For instance, is the proposed plan even feasible, based on your current income? Will you be able to make the payments as they are outlined?
- Whether or not the plan itself is feasible to satisfy the outstanding debt. In other words, will the proposal allow you to make the required disbursements to your creditors? Will the payment plan pay enough towards what is owed?
Sometimes, the your initial Chapter 13 plan can have various complications that will make it more challenging to pass the feasibility requirement. One example is if your proposed payment plan is expected to adjust in the future. If your payments are planned to increase down the road, will your current income be able to support the increased payments? Another example is job loss. If you lost your job would you be able to make the same payments as outlined in your proposed plan?
Understanding “Feasibility” in Chapter 13 Bankruptcy requirement is important for your overall outcome of your case. This is why it is extremely important to work with Texas bankruptcy lawyers, they can help you ensure that your proposed strategy is not only feasible, but in your best financial interest as well.