What does feasibility of a Chapter 13 plan mean?

31 May What does feasibility of a Chapter 13 plan mean?

When someone files a Chapter 13 plan and/or modification to the Chapter 13 plan, the Trustee or Judge may not approve the plan or modification based on non-feasibility of the plan. In simple English, this means the proposed plan/modification is destined to fail. In order to confirm a plan, the court must find that the debtor will be able to make all payments under the plan and to comply with the plan. The court will rely on the Chapter 13 Trustee to determine whether the plan is feasible. Red flags that a plan is not feasible: when the debtor’s budget on its face reveals insufficient disposable income to make plan payments; the budget is unrealistic and does not provide for basic needs (in other words, your living expenses exceed your income.)

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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.
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