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Behm Law Group, Bankruptcy Attorneys

Bankruptcy News & Recent Cases

Working With the Best Effort Requirement When Filing for Chapter 13 Bankruptcy in Fairmont, MN

June 6th, 2017 · No Comments

If you’re considering filing for bankruptcy, you’ve probably started to do some research of your own and learning about your options. If you think you may qualify for Chapter 13 bankruptcy, you might have already discovered that a long road of meeting financial and legal obligations set by the U.S. Bankruptcy Courts, your bankruptcy trustee, and your creditors is ahead of you. Navigating these requirements is crucial to successfully working through a Chapter 13 petition and completing a repayment plan, but it can be a difficult process without the help of a well-versed professional. Behm Law Group, LTD. can provide that help with our experienced bankruptcy lawyers in Fairmont, MN

One stipulation you must continue to meet if you’re about to begin your repayment plan is the Best Effort requirement.

What is “Best Effort?”

Essentially, the Best Effort requirement demands that you must be able to prove you will use the entirety of your disposable income—any income you do not spend on taxes, household needs, transportation, or other debt payments—on meeting your monthly repayment plan installments. Specifically, your disposable income must be used to make payments to nonpriority unsecured creditors in your repayment plan.

Nonpriority Unsecured Debts

Your nonpriority unsecured debts (such as credit card debt, personal loans, and medical bills) may not always be paid back in full like your priority debts. The amount you pay back to your nonpriority unsecured creditors is again determined by your average income. If your income average over the six months prior to filing for bankruptcy falls below the Minnesota median income, the length of time you have to repay your nonpriority unsecured debts back can be as short as 36 months or 3 years; your creditors, accordingly, would receive lesser amounts. If your income is higher than state median, the length of time you have to repay your creditors must be 60 months or 5 years. In such a case, your creditors would receive larger amounts.

With the right guidance it’s easy to meet the Best Effort requirement and still have deduction options for your disposable income. Behm Law Group, LTD. can provide that guidance in the months leading up to your petition and throughout the process of filing for Chapter 13 bankruptcy. For more information about how our experienced bankruptcy lawyers in Fairmont, MN can give you the best legal advice and assistance with your bankruptcy case, contact us at (507) 387-7200 today.

Tags: Chapter 13 Bankruptcy ·


 

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