If you have considered filing Chapter 13 Texas bankruptcy, you may wish to familiarize yourself further with the “best effort” requirement. What this requirement means is that your repayment plan under Chapter 13 must represent your “best effort” to make payments to as many unsecured creditors as you can in the order they are established by the trustee. Any and all disposable income that is not taken up by the repayment of secured debt must be allocated in the bankruptcy plan to pay back unsecured creditors like credit card debts and medical debt.
Best Effort in Chapter 13
The best effort payment is determined by a form similar to the Chapter 7 means test, in which you list your income and calculate your disposable income. In Chapter 13 bankruptcy, the amount that results from this worksheet becomes the best effort payment, which you must devote in full to the payment of unsecured debts during the three to five year repayment plan.
The best effort requirement can seem a bit harsh, but it is in place to ensure fairness in the repayment of creditors in Chapter 13 cases. In order to successfully complete the repayment period of a Chapter 13 bankruptcy, you must be able to cut all extra spending and put all disposable income toward the repayment of these debts, so in a way the best effort requirement is merely an automatic method of ensuring that this happens. If it were not in place, the temptation might be too great to spend the extra income elsewhere, knowing that the unsecured debt is slated to be discharged at the end of the repayment period.