Filing for Bankruptcy in Luverne, MN, Before or During the Holiday Season

The holiday season is a time spent with family and friends, giving gifts, and attending festive gatherings. It’s also a time when the entire country greatly increases its spending. The pressure of spending more money during this time can place undue stress on those struggling with debt or going through a bankruptcy proceeding. However, the holiday season is actually the best time to file for bankruptcy. Behm Law Group, Ltd.  offers legal advice and assistance if you’re considering filing for bankruptcy in Luverne, MN, this holiday season.

It may seem counterintuitive and in un-holiday-like spirits to file for bankruptcy during this time of cheer and abundance, but because of the timeline involved, filing before December 31st may be your best option.

There are several reasons why you may benefit from filing for bankruptcy before December 31st, and some are directly linked to what happens during the holidays. For example:

  1. Christmas or year-end bonuses give you an overall increase in your income. These bonuses are considered verified parts of your total income, and they are subject to scrutiny in your bankruptcy case.
  2. Gifts as cash or check are also added into your gross income, even though they are personal non-employment related transactions. These gifts from family and friends can be considered as income in your bankruptcy case.

This change in your income comes into play when you complete the Means Test. To qualify for Chapter 7 liquidation bankruptcy, you must satisfy the Means Test, meaning your income must be lower than the state median for a similar household size. The slight increase in your income during the holiday season might be the difference between filing for Chapter 7 and being forced into Chapter 13.

The timeline for the bankruptcy Means Test takes into account the last six months of your income. However, the six-month period prior does not end directly on the date you file for bankruptcy relief. Instead, if you file your petition on or before December 31st, the six-month period ends at the end of November. This means that the income as calculated for the preceding 6 months (June – November) would be less for purposes of completing the Means Test, giving you a better chance of qualifying for Chapter 7 bankruptcy.  If you were to file bankruptcy after December 31st, all of the income you would receive in December from bonuses, profit sharing, commissions or gifts would be included in the 6 month look-back period (July – December).  Your income could be artificially inflated by these sources such that you would not satisfy the Means Test and you would have to file a chapter 13 bankruptcy.

If you’re considering filing for bankruptcy in Luverne, MN, the date you file may affect your petition. For more information about bankruptcy and the Means Test, contact Behm Law Group, Ltd. at (507) 387-7200 today.

Understanding Fraudulent Behavior When Filing for Bankruptcy in Windom, MN

Bankruptcy relief is a very powerful remedy.  Quite literally, with a few exceptions, all of your legal, contractual obligations to pay debts are discharged and nullified.  Creditors can never pursue you for collection on those debts.  If you do everything that is required by the bankruptcy code and the associated bankruptcy rules, the debt relief you receive is a certainty.  When you choose to file for bankruptcy relief, no one comes to your house to see what you have and take inventory of your assets.  However, the benefit of bankruptcy relief is only for the “honest but unfortunate debtor”.  In other words, you must be completely forthright and honest in disclosing and listing all of your assets and all of your creditors. You’ll be required to review your bankruptcy petition and related schedules with your bankruptcy attorney and you will be required to sign off on them under oath and subject to penalty of perjury.  One way a bankruptcy case can be rejected is if one intentionally fails to list all of one’s assets and creditors.  Another way a bankruptcy case can be rejected is if one is sloppy and negligent in preparing and reviewing one’s bankruptcy petition and schedules.  Mistakes and errors in one’s sworn bankruptcy petition as a result of sloppiness or inattentiveness to necessary details can be often construed as an intentional failure to list one’s assets and creditors.  If one intentionally fails to list one’s assets and creditors or if mistakes are made due to one’s sloppiness in preparing a bankruptcy petition, one could be accused of bankruptcy fraud and the bankruptcy court could completely deny one’s bankruptcy relief.  If the supposed fraud is serious enough, one could even be prosecuted, fined and incarcerated.  Behm Law Group, Ltd.  offers expert legal advice and assistance to help you avoid conduct or mistakes that could be construed as fraudulent behavior when you file for bankruptcy in Windom, MN.

With the help of an experienced bankruptcy attorney, it’s much less likely for someone filing for Chapter 7 or Chapter 13 bankruptcy to commit unintentional fraud. When you choose to complete your bankruptcy petition without professional assistance, your chances of making serious mistakes—an occurrence that can come in the form of providing inaccurate information on your bankruptcy forms and schedules, failing to attend required meetings/hearings, failing to undergo credit counseling prior to filing, or several other rare circumstances—are increased.

In addition to the several reasons you can accidentally commit fraudulent behavior on your bankruptcy petition, there are many ways one can commit willful bankruptcy fraud.

Willful Fraud

If you file a bankruptcy petition with clear fraudulent intentions, our attorneys will decline to work with you. For example, if your situation reveals that you’ve committed any of the following actions, we will not represent you:

  • Created false documents
  • Failed to list all assets
  • Withheld or destroyed documents relevant to your case
  • Hid a property transfer, including personal gifts of property that may be involved in your bankruptcy case
  • Bribed or paid-off a creditor, lender, or other party to hide information pertinent to your case

In more common circumstances, filers who willfully commit fraudulent behavior may have done the following:

  • Provided inaccurate income and expense information in a Chapter 7 or Chapter 13 case or prior to filing for bankruptcy relief or when submitting credit applications to creditors from whom one may have sought a loan
  • Purchased various items, such using credit cards to engage in gambling activities, not identified as “necessities” prior to filing for bankruptcy.
  • Writing personal or business checks while planning to file for bankruptcy in a short period (i.e. writing a bad check)

If you have engaged in any of these or like activities, you must fully disclose every detail to your bankruptcy attorney before you elect to file for bankruptcy relief.  Such conduct could be a basis for a finding of bankruptcy fraud.  Indeed, bankruptcy may not even be an appropriate remedy for you to pursue.  If you’d like to discuss filing for bankruptcy in Windom, MN, and take full advantage of the debt relief benefits provided by the bankruptcy code, contact Behm Law Group, Ltd. at (507) 387-7200 today.

Exemption Basics in Chapter 7 and Chapter 13 Bankruptcy in Pipestone, MN

Whether you file for liquidation bankruptcy (Chapter 7) or reorganization bankruptcy (Chapter 13), a bankruptcy estate – a legal entity that is separate and distinct from you, the bankruptcy filer – will be created by operation of the bankruptcy code.  All of your property will essentially be dumped into the bankruptcy estate and, for a time, the bankruptcy estate will actually own the property.  However, Congress did not want people to emerge from the bankruptcy process completely destitute and with no ability to reorganize their financial situation.  While there is a risk that one may lose some assets when one files for bankruptcy relief, such a situation is the exception rather than rule.  Most people go through bankruptcy and retain all of their assets.  Congress allocated various value allotments called “bankruptcy exemptions” that people can assert and absorb most or all of the property back out of the bankruptcy estate.  Depending on your situation and the exemptions you claim, Behm Law Group, Ltd. can help you understand how your exemptions work and what role they play when you file for bankruptcy in Pipestone, MN.

 

When exemptions come into play during your bankruptcy case, you may use them to protect your value interest or equitable interest in your assets from liquidation.  There is a common misunderstanding that one gets to keep a car or a house, etc. in bankruptcy.  It is much more accurate to say that one gets to protect or keep an equitable interest in an asset.  For instance, if you own a home worth $200,000 and the mortgage loan is $150,000, your equitable interest is $50,000.  It is this $50,000 that you would protect with the applicable bankruptcy exemption.  The applicable bankruptcy exemption would not make the underlying mortgage go away and you would still have to pay it or the mortgage lender could initiate foreclosure proceedings against your house.  Every individual filer has access to the bankruptcy exemptions in both Chapter 7 and Chapter 13 cases.  As indicated above, the policy goal of bankruptcy is rehabilitative and the intent behind the bankruptcy code is not to leave a bankruptcy filer completely destitute.  Rather, the intent is to allow a person some property with which to reorganize one’s financial situation and move forward free of debt entanglement (other than those debts one actually wants to retain).

 

In Minnesota, a bankruptcy filer can choose either the exemptions provided under Minnesota state law or the exemptions provided under the federal bankruptcy code.  Whether one elects one or the other depends largely on how much equity or value one has in one’s homestead.  Again, equity is the value of an asset in excess of the debt owed on that asset.  For instance, presume again that one owns a home worth $200,000 and that one owes $150,000 on the subject mortgage.  One, therefore, has $50,000 equity.  One would protect this equity with one’s homestead exemption.  The homestead exemption under the Minnesota state exemptions is $390,000 for a homestead that is located in a city/town and $975,000 for a rural homestead or farm.  The homestead exemption under the federal bankruptcy code is $23,675.  In this example, given the $50,000 equity figure, one would want to use the exemptions provided under Minnesota state law where one could protect the full $50,000.  If one were to choose the exemptions provided under the bankruptcy code, one could protect only $23,675 and the bankruptcy trustee administering one’s case could sell the house, pay off the $150,000 mortgage and pay the bankruptcy filer the exemption claim of $23,675 and use the rest to pay one’s creditors.

 

The analysis regarding one’s property and the applicable bankruptcy exemptions needed to protect it can be highly nuanced and exceedingly detailed and whether one chooses the exemptions provided under Minnesota state law or those provided under the federal bankruptcy code depends on one’s unique circumstances.  For more information about how exemptions can benefit your situation when you file for bankruptcy in Pipestone, MN, contact Behm Law Group, Ltd. at (507) 387-7200.

Understanding GAL Fees When Filing for Bankruptcy in Mankato, MN

Just like the rest of the individuals in the U.S., those considering bankruptcy are often juggling many life situations. From divorce to custody battles, many of these situations involve legal procedures and can be difficult to reconcile in the face of filing for bankruptcy. If you’re considering filing for bankruptcy in Mankato, MN, Behm Law Group, Ltd. offers legal counsel to help you balance your life outside of the bankruptcy process.

One common situation many of our clients find themselves working through before or during their bankruptcy petition is divorce. If you’re working through a divorce or are recently divorced, there are a number of ways it may affect your bankruptcy case.

If a state court has appointed a Guardian Ad Litem (GAL) during your divorce, you may have to pay for that obligation throughout your bankruptcy case. There are some circumstances, however, where GAL fees can be discharged which means that you would not have to continue paying them.

What is a GAL?

In cases of divorce when a legal dispute over the custody of children arises between spouses, the court will appoint a GAL to look out for the best interests of the children. The GAL investigates the parents and the relationships the children have with each of the parents. The GAL uses this investigation to recommend to the court which parent should have primary custody. The parents are responsible for paying the fees for the GAL.

Discharge of GAL Fees

In many cases, GAL fees are considered domestic support obligations, and, like alimony and child support, they sometimes cannot be discharged during Chapter 7 or Chapter 13 bankruptcy cases. Nevertheless, like all other domestic support obligations in bankruptcy, there are some times where GAL fees can be fully or partially discharged.  If you and your ex-spouse are jointly liable, you may be able to discharge a portion or all of the fees owed if the right to collect the fees has been assigned or sold to a third-party collection agency or debt purchaser.

While your chances for GAL fee discharge may be limited, our bankruptcy attorneys will work with you to obtain the broadest debt relief possible.  For more information about the assistance we provide regarding the filing of bankruptcy in Mankato, MN, contact Behm Law Group, Ltd. at (507) 3087-7200 today.

Case Dismissal With or Without Prejudice When Filing for Bankruptcy in Windom, MN

In the U.S., bankruptcy is an option for individual consumers and small businesses alike. Despite the access that all parties have to the bankruptcy code, today’s bankruptcy laws have many precautions to prevent filers from taking advantage of the system. Whether you commit fraudulent behavior purposefully or accidentally during your case doesn’t matter to the court when it comes to a case dismissal. Avoiding difficulties during your case can be as simple as taking advantage of the services a trained bankruptcy lawyer provides. At Behm Law Group, Ltd., we offer expert legal advice and we can be of assistance to you when you file for bankruptcy in Pipestone, MN.

The differences between mistakes and fraud are not always considered in the outcome if the court decides to dismiss your bankruptcy case, but there are still two standing descriptions of how your case can be dismissed: “with prejudice” and “without prejudice.”

Dismissal with Prejudice

If you’ve displayed willfully fraudulent behavior or purposefully disobeyed court orders, your case may be dismissed with prejudice. Your case could also be dismissed and you would be prohibited from filing for bankruptcy relief again for 180 days if you requested a dismissal of your bankruptcy case after a creditor filed for relief from the automatic stay.  Learn more about dismissal with prejudice here.

Dismissal without Prejudice

While your case is still dismissed, you land yourself in a slightly better situation if it’s dismissed without prejudice. The biggest difference between dismissal with prejudice versus dismissal without prejudice is that you can file a bankruptcy case again immediately if your previous bankruptcy case was dismissed without prejudice. However, there may be limitations set on the automatic stay when you choose to file for bankruptcy relief again.

You may have your case dismissed without prejudice if you made a mistake on your petition such as a missing or incorrect form, missing pay stubs and other supporting documents, not paying court fees, and not attending a credit counseling course or other mandatory meetings. You can also have your case dismissed without prejudice if you stop making payments on a Chapter 13 repayment plan or if you’re not eligible for any form of bankruptcy.

Because filing for bankruptcy is such a complex legal process, it’s generally in your best interests to make use of the services qualified legal professionals offer. For the help our experienced attorneys provide when you file for bankruptcy in Pipestone, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.

Stripping Secured Liens on Property During Chapter 13 Bankruptcy in Waseca, MN

While Chapter 7 bankruptcy is designed to help individuals and small businesses with low incomes and dischargeable debts, Chapter 13 is more beneficial to those who may have higher incomes yet still struggle with financial obligations. Because in most cases you cannot qualify for Chapter 7 bankruptcy with an income higher than the Minnesota median income level, Chapter 13 can be your saving grace for relieving debt and restructuring your finances in a manner that is suited to your income. If you’re considering filing for Chapter 13 bankruptcy in Waseca, MN, Behm Law Group, Ltd. can offer legal advice and assistance throughout the process.

The process of debt reorganization that takes place during a Chapter 13 case requires the examination of your different debts to determine how they can be handled. One aspect of your debts and your property that is analyzed is the subject of liens your creditors may have on your house, vehicle or other property.  Creditors with such liens have debts that are secured or collateralized by your property.  If you don’t pay the creditors, they can take their collateral, sell it and use the sale proceeds to retire the debts you owe them.

If your creditors have a secured liens on your property, you’ll have to continue repaying those debts directly to those creditors during your Chapter 13 repayment plan. However, there are some ways you can strip secured liens from the property serving as collateral, thereby turning them into unsecured debts. In most Chapter 13 repayment plans, only small percentages of unsecured debts are paid back.

Strippable Liens

 If there is a “junior” lien on an asset you own, you may remove that lien and turn the secured debt into unsecured debt.  A common example of a junior lien is a second or third mortgage on your house.  For example, if you own a house that has a market value of $150,000.00 and there is a first mortgage with Creditor A in the amount of $155,000.00, a second mortgage with Creditor B in the amount of $25,000.00 and a third mortgage with Creditor C in the amount of $10,000.00, you have total mortgage debt in the amount of $190,000.00 against an asset that is worth $150,000.00.  The house is collateral for all three mortgages.  However, the mortgages with Creditor B and Creditor Care junior liens to the mortgage held by Creditor A.  They are lower in priority with regard to foreclosure rights or collection rights to the property.  The mortgages with Creditor B and Creditor C are wholly unsecured mortgages because the entire market value of the house is less than the amount of the mortgage held by Creditor A.  If Creditor A were to foreclose its mortgage on the house, Creditor B and Creditor C would get nothing because the entire foreclosure sale proceeds would be extinguished through payment on the mortgage held by Creditor A.

When you have wholly unsecured junior mortgages or junior liens on your house, such liens can be stripped off of your house through the Chapter 13 bankruptcy process.  When a junior lien is stripped, the subject mortgage debt, is treated as an unsecured debt.  It is no different than a credit card debt or a medical debt.  This means that you do not have to fully repay the debt.  It will be completely discharged when your chapter 13 bankruptcy is concluded.

Understanding when you can and cannot strip a junior lien can be difficult without the guidance of a qualified legal professional. Take advantage of the expert counsel our bankruptcy attorneys provide for your bankruptcy case. Contact Behm Law Group, Ltd. at (507) 387-7200 today for more information about filing for Chapter 13 bankruptcy in Waseca, MN.

Secured Debts and Secured Properties Handled with Chapter 7 Bankruptcy in Fairmont, MN

In most cases of bankruptcy, the individuals or businesses that file are struggling with multiple types of debt. These debts can involve mortgages, credit card debt, tax debts, and even personal loans. If you’re finding it impossible to meet payments on your debts, filing for bankruptcy might be right for you. Behm Law Group, Ltd. can help you decide, based on your own situation, whether you should file for Chapter 13 bankruptcy or Chapter 7 bankruptcy in Fairmont, MN.

If you’re overwhelmed by debts that can be discharged in a successful Chapter 7 case, then liquidation bankruptcy is most likely the best choice. Chapter 7 bankruptcy cases are often most effective when a large portion of your debt types are secured debts.

Secured Debts

Secured debts involve property. In short, if you’ve agreed to make payments on a property that you have rented, borrowed, or bought, you have a secured debt on that property. When secured debts are treated in a Chapter 7 case, they’re most beneficial to all parties involved. This is because the debt can be discharged, relieving you of all payment obligations to that debt, and the property asset involved in the debt can be liquidated to repay your creditor. However, even during a Chapter 7 case, there are several ways a secured debt can be handled.

Surrendering Secured Properties

If you choose to surrender your properties involved in a secured debt, you’ll simply return them to your creditor. Under the protection of Chapter 7 bankruptcy, this surrender will remove your creditor’s lien on the property and erase your liability to the loan when the debt is discharged. This is the most common action under Chapter 7 for secured debts.

Redeeming Secured Properties

If you wish to retain the property involved in a secured debt (for example, if you want to keep your car or house), you can choose to redeem it. This requires you to pay your creditor the value they would request for replacing the property without taking the interest you owe on the debt into account. If you owe a large amount more in loan interest than the property itself, this may be a beneficial choice.

Reaffirming Secured Debts

Finally, you may choose to reaffirm a secured debt after your bankruptcy case is concluded. In most cases, this will reinstate your original debt on the property and loan, but you may attempt negotiation with your creditor for a lower debt. This protects creditors from reselling your property at lower costs than you owe, and it allows you to keep your property with an opportunity to negotiate lowered debt obligations.

If you’re considering filing for bankruptcy, you have to choose which type of bankruptcy will be most beneficial given your financial situation. Contact Behm Law Group, Ltd. today for expert legal advice and assistance with Chapter 13 bankruptcy and Chapter 7 bankruptcy in Fairmont, MN.

Debt Discharge Possibilities in Chapter 13 Bankruptcy in Redwood Falls, MN

The benefits of filing for bankruptcy vary between the different chapters. If you choose to file for Chapter 7 bankruptcy, you benefit from the fresh start it provides after your discharge order is issued by the court in about ninety to one hundred and twenty days. If you choose to file for Chapter 13 bankruptcy, you benefit from a restructuring of your debts into a manageable repayment plan and you will receive a discharge order discharging your debts after your repayment plan is concluded in three to five years. However, for individual consumers filing for either chapter, there is some overlap of the different benefits each type of bankruptcy provides. If you are considering filing for Chapter 13 bankruptcy in Redwood Falls, MN, Behm Law Group, Ltd. can help you find ways to gather benefits that you might get during a Chapter 7 case as well.

A Chapter 13 bankruptcy is designed to restructure your debts into a new repayment plan that will last from three to five years. A common misconception about this restructuring is that the filer will continue to repay all of one’s debts in full over the payment plan period. This is true in some cases but most debts will only be partially paid.

Debts Discharged

While all of your priority unsecured debts, such as most tax debts and child support debts, must be paid in full in a Chapter 13 case, there are some nonpriority unsecured debts that will only be partially paid and then the balance will be discharged.

  1. Personal Loans: Any personal loans from friends, family, or acquaintances are considered unsecured nonpriority debts. These “loose contract” loans will be only partially paid with Chapter 13 bankruptcy; however, if they are secured by property or other assets, the creditors may take back those assets if you do not pay the loans back.
  2. Credit Card Debt: This is the most common type of unsecured nonpriority debt that filers hold when entering bankruptcy. With Chapter 13, that credit card debt can be wiped out after being partially paid through the chapter 13 repayment plan.
  3. Some Tax Obligations: The majority of your tax debts must be repaid at a decided percentage with your Chapter 13 repayment plan. However, if you have very old tax debts, they can be considered nonpriority unsecured debts and be discharged with Chapter 13.
  4. Medical Bills: Medical bills can be crippling, but when you file for Chapter 13 bankruptcy, those debts will be discharged if they were accumulated when your insurance did not completely cover your medical care.
  5. Other: If there is a judgment against you for negligence or contract breach involving a certain nonpriority unsecured debt, it’s possible such a debt can be discharged in Chapter 13. Debts involving injury to another person caused by drunk driving will not be discharged.

If you are considering filing for Chapter 13 bankruptcy in Redwood Falls, MN, or if you are struggling with these kinds of debts among other financial obligations, Behm Law Group, Ltd. can help. Contact us at (507) 387-7200 today for information about how bankruptcy can work for you.

Treatment of Tax Debts in Chapter 7 Bankruptcy in Mankato, MN

Like the vast majority of countries across the globe, the functioning of the U.S. government and the U.S. economy are largely related to the payment of taxes. While it’s important for everyone to chip into the country finances with taxes, it’s possible for debts related to taxes to be accumulated if a business or individual is struggling financially. However, if you file for bankruptcy, your tax debts may be handled differently than other types of debt involved in the process. In particular, when you file for Chapter 7 bankruptcy in Mankato, MN, the treatment of your tax debts can be complex and confusing. Behm Law Group, Ltd. offers expert legal advice and assistance concerning your tax debts and other financial circumstances in a bankruptcy case.

Chapter 7 bankruptcy allows for the discharge of several kinds of debts you owe. However, the process doesn’t discharge all types of debts, and tax debts are often considered non-dischargeable. In fact, there are conditions as to when your tax debts can be discharged, but your debts must meet all the requirements listed below.

  1. Your tax debts may be discharged in a Chapter 7 bankruptcy case if the due date for your return was three or more years before the date that your bankruptcy case was filed; this includes extensions of return due dates. The time period is measured from the date you filed for bankruptcy.
  2. If your tax debts are due on income taxes they may be eligible for discharge in Chapter 7 bankruptcy. This includes federal income taxes, state income taxes, and gross receipt taxes.
  3. The return for the tax debts you owe must also have been filed more than two years before the date that you filed for bankruptcy. This often doesn’t include returns filed with a “late” status, but in some cases the bankruptcy court will allow tax debts on a late return to be discharged if you meet all other requirements listed.
  4. Even if you have filed your return within the time period required and the return itself and the subject tax debt for that return was at least three years old, your taxes must still meet the additional requirement of the 240-day assessment. This means if your tax return/debt was assessed by the taxing authority less than 240 days before the date that you filed for bankruptcy, your tax debts will not be eligible for discharge.
  5. Additionally, if there is any fraud, evasion, or willful misconduct involved with your tax debts or tax return, those debts will not be eligible for discharge in a Chapter 7 bankruptcy case.

Although the requirements for tax debt discharge in a Chapter 7 bankruptcy case are strict, it’s not impossible for those tax debts to be eligible for discharge. The help of an experienced bankruptcy attorney is key in helping you understand and predict the way your tax debts will be treated when you file for bankruptcy.

Contact Behm Law Group, Ltd. today at (507) 387-7200 for more information about Chapter 7 bankruptcy in Mankato, MN.

Feasibility Requirement vs. Mathematical Feasibility for Chapter 13 Bankruptcy in Redwood Falls, MN

When you file for Chapter 13 bankruptcy, you’ll be required to meet a varying roster of requirements throughout the process for your case and repayment plan to continue from stage to stage. If you met the stipulations set by the U.S. Bankruptcy Code necessary to move your petition into the next stage, you’ll begin the restructuring of your debts into a suitable repayment plan. Because building a proposal for a repayment plan that your trustee will accept is the most difficult stage of filing for Chapter 13 bankruptcy, the help of a bankruptcy attorney is critical at this point. Behm Law Group, Ltd. offers the legal advice and assistance you need for a successful petition for Chapter 13 bankruptcy in Redwood Falls, MN.

One of the many requirements that your repayment plan proposal must meet for approval is the passing of the Feasibility Requirement. Your trustee will examine your plan proposal to ensure you can meet your outlined payments month to month. While it is essentially a way of determining if your plan is viable given your current and projected future financial situation, the term “feasibility” holds two meanings in a Chapter 13 bankruptcy case.

Feasibility for You

Whether or not your plan is feasible is determined in part by your own financial situation. If you can meet payments, your plan is feasible. If your income changes and you can no longer meet payments, your plan becomes infeasible. The Feasibility Requirement may be tested against your situation several times throughout your 3-5 year repayment plan. What the filer understands as the “Feasibility Requirement” most often depends entirely on one’s financial abilities, but in some cases, it can refer to another type of feasibility.

Feasibility for Your Trustee

The Feasibility Requirement in a Chapter 13 case can also depend on Mathematical Feasibility. Mathematical Feasibility (or Disbursement Feasibility) comes into consideration after the filer passes their own requirements for the Feasibility Requirement. If you can feasibly complete your repayment plan, your trustee must also consider the disbursing of payments to creditors. Because some plans are proposed based on inaccurate information, trustees must calculate the sum transactions. The necessary output to the creditors might not always be equal to the input in the filer’s proposed plan. If this is the case there’s a mathematical infeasibility, and the plan cannot be confirmed until the inaccuracies are rectified.

The process of proposing a repayment plan when filing for Chapter 13 bankruptcy in Redwood Falls, MN, can be somewhat complicated and difficult. Don’t hesitate to contact Behm Law Group, Ltd. at (507) 387-7200 for more information about the counsel and support our experienced attorneys can provide.