For those debtors considering Chapter 13 Bankruptcy , it is important that you create a clear, feasible plan to repay your debts within the prescribed time period. Sometimes, a bankruptcy trustee or judge will disapprove a Chapter 13 bankruptcy plan because of feasibility issues. When a bankruptcy court says that a Chapter 13 bankruptcy plan is not feasible, what they’re saying is that your plan is not realistic and most likely you won’t be able to follow it.

Things you need to make a Chapter 13 bankruptcy plan feasible:

  1. Income. If you are unemployed a Chapter 13 bankruptcy plan is most likely not feasible for you.
  2. Disposable income. You need to have money left over after paying your essential living expenses to fund the Chapter 13 bankruptcy plan. Essential living expenses usually include, rent/mortgage, utilities, car payment, food and anything else agreed to be essential. For example, if you have a chronic medical condition you may also need to buy medication or equipment on a regular basis which will reduce your disposable income.

Even if you think you may qualify for a Chapter 13 bankruptcy, it may not be in your best interest to file one. This may be the case if, for example, your home is worth less than the mortgage you have on it. Currently, homeowner advocates are fighting for legislation that would allow bankruptcy courts to modify mortgages that are toxic/upside down. That law has not passed yet.