When you file for a Chapter 13 Texas bankruptcy, there are many legal terms that can be difficult to understand. While a bankruptcy attorney can help you navigate through most of the Texas bankruptcy process, there’s still quite a bit of legal jargon you must understand. One of the most common terms associated with a Chapter 13 filing is “feasibility,” as it relates to the “feasibility requirement.” The reason this term is confusing is because the feasibility requirement actually refers to two different things in your Chapter 13 Texas bankruptcy.
Why Feasibility is Important in Chapter 13
During a Chapter 13 Texas bankruptcy, the debtor must present a plan to the court concerning how he or she will reorganize payments to creditors. Typically, the plan will outline a monthly payment strategy that, if approved through the Chapter 13 filing, will allow the debtor to repay all debts. This is where the feasibility requirement comes into play. During a Chapter 13 Texas bankruptcy, the feasibility requirement refers to:
1. The debtor’s ability to adhere to the proposed plan. For instance, is the proposed plan even feasible, based on your current income?
2. 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?
The feasibility requirement can determine the fate of your Texas bankruptcy filing. Fortunately, working with a bankruptcy attorney can help you ensure that your proposed strategy is not only feasible, but in your best financial interest as well. Sometimes, the proposal can have various complications that make it more challenging to pass the feasibility requirement of your Chapter 13 Texas bankruptcy filing.
For instance, if your proposed payment plan is expected to balloon in the future, will your current income be able to support the increased payments? Is your current income stable enough to support your proposed plan? Basically, the feasibility requirement revolves around the practicality of your proposal, which protects both you and your creditors. If your proposal is mathematically infeasible, your bankruptcy attorney will help you adjust payments to result in a situation that makes your Texas bankruptcy possible.