The Reasonable Debtor

Debtors in reorganization are generally not permitted to be wasteful, or lazy, or live elegant lives at the expense of their creditors. These types of behaviors fall in the realm of being unreasonable, and the Court may judge a Plan based on these behaviors as lacking in good faith. Good faith is the cornerstone of successfully navigating the bankruptcy system. Unfortunately, this is not a standard that is easily ascertained, or defined by some statute. It is the kind of thing that Judges are entrusted under the law to decide. For this reason, two cases in the same courthouse in front of different judges may produce different results when it comes to where to draw the line. Still, Debtors with very unique circumstances, and Debtors who propose to pay all their debts over time, should not be discouraged from seeking Bankruptcy relief. The system exists to help the honest debtor obtain a fresh start and, so, anyone who finds themselves insolvent should not be afraid to utilize this special, constitutionally mandated, system to help them reshape their financial lives.

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