When you file for bankruptcy, there are several tests that you must meet in order to complete a successful Chapter 13. Number one is Feasibility . What that means is when you file the case and we say,”We wanna pay back these creditors and we’re gonna make a payment of 1000$ a month we have to demonstrate to the trustees and the court that you have resources and the funds to make that 1000$ payment. And when we look at your income and your expenses and we show that you can only make a 500$ payment that’s gonna trigger a feasibility objection. So in order to pay the creditors you want to pay and keep the property that you want to keep, you’re gonna need to find another way to make up that income. There’s a couple of ways to do that: Number one is you can get another or second job or another source of income whether it’s from employment or whether some contribution from a family member or a friend who’s willing to make those payments toward you to make up the difference or you’re willing to reduce some expenses to you’ll have necessary surplus of a 1000$ to make your plan payment. Another test that you have to file when you file for bankruptcy is disposable income. What that means is if you have a lot of income, more income that you need to get caught up on the things that you want to pay for. We look at your income and expenses and devote a certain amount of your monthly surplus towards your unsecured creditors and if we’re not devoting enough where the trustee objects then we have to prove that up and pass that test. There’s one other additional test and it’s called the best interest of your creditors. And that means if you file a Chapter 13 bankruptcy case and you have some investment property or you have some stocks or bond that are above the standard amount that we can accept, you could liquidate that property and pay back your creditors therefore you have the opportunity to either convert and file a Chapter 7 bankruptcy case, liquidate that property and pay your creditors or stay in the 13 and pay back the difference that the creditors would have received if you had liquidated it.
