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Understanding the Good Faith Requirement in Chapter 13 Bankruptcy


There are many requirements you must meet for your bankruptcy petition to gain the approval of the court. Fortunately, when you work with an attorney who specializes in bankruptcy cases, he or she will ensure that you meet all of those requirements, such as the good faith requirement. The good faith requirement involves the repayment plan that your bankruptcy attorney will submit to the court along with your Chapter 13 bankruptcy petition.

Defining the Good Faith Requirement

Under a Chapter 13 bankruptcy, you will repay a portion of your debt over a period of three to five years. The court expects you to designate all of your disposable income for this purpose and your repayment plan should reflect this. This is known as submitting the repayment plan in good faith. Your disposable income is any money that you do not need for basic living requirements, such as housing, transportation, and food. If the bankruptcy court and the trustee believe that you have submitted the repayment plan in good faith, they will approve it. Otherwise, the trustee may raise objections and the court may reject the plan.

Identifying Possible Reasons for Objection

Your bankruptcy trustee may raise objections if he or she believes you have not calculated your current monthly income accurately. Your current monthly income is the average income for the past six months just before your bankruptcy filing. If the trustee determines that you received a pay raise shortly before your bankruptcy filing or another type of increase in income, he or she may object to the repayment plan on the basis that you did not report it. Another possible reason for an objection is when the trustee believes you overstated the amount you need to support yourself and your family.

At Cutler & Associates, Ltd., our bankruptcy attorneys have years of experience handling complex bankruptcy cases. We’ll work closely with you to ensure that you have a reasonable repayment plan that your bankruptcy trustee will accept. Contact our offices in Aurora or Schaumburg by calling (847) 505-0380 and ask about scheduling a free evaluation.

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