What is a Best Effort Requirement in a Bankruptcy?

: Chris Lee Law Firm

  Filed under: Bankruptcy

bankruptcyWhen you enter into your Chapter 13 bankruptcy there are going to be a few terms that you need to become familiar with. Hopefully you have chosen to use an experienced Fort Worth bankruptcy lawyer to assist you with your bankruptcy which will make the entire process much easier and far less stressful for you.

With your Chapter 13 bankruptcy you are going to have to devise a repayment plan to satisfy your creditors. This repayment plan has got to be approved by the bankruptcy court. This is a best effort requirement. The plan has to follow all of the rules and requirements that pertain to the Chapter 13 bankruptcy. Your legal counsel will certainly help you to draft your repayment plan.

The concept of the best effort requirement is that your plan shows that you are making every effort to satisfy your creditors as much as you are capable of doing which depends on the amount of debt you have compared to the disposable income you can use towards this.

In your present financial state you are probably under the impression that you are not going to be able to satisfy all of your creditors and can’t see a way out of this otherwise you wouldn’t be going bankrupt in the first place. There are some creditors that will have to be paid out in fall however there will be others that will only receive a portion of repayment or may not receive any payment at all. The whole concept of the repayment plan is to make it comfortable enough that you can handle your debt without getting a further behind or losing all of your assets.

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