When you file for Chapter 13 bankruptcy, you'll propose a plan to pay creditors, and the court decides whether to "confirm" or approve your proposed repayment plan at a confirmation hearing. Once confirmed, you pay your creditors according to the terms in the Chapter 13 plan, which your creditors must accept to satisfy their claims.
The confirmation hearing is scheduled not more than 45 days after the 341 meeting of creditors in your Chapter 13 case. The court will send out a notice of the hearing in advance.
You'll begin making the proposed Chapter 13 payments about thirty days after filing. If the court confirms the plan, you'll continue making your payments, sometimes adjusting the amount depending on the hearing outcome.
Beginning payments soon after filing allows plan completion within three or five years. If the judge doesn't confirm the Chapter 13 plan, the Chapter 13 trustee appointed to your case returns your payments, with some exceptions.
In many cases, only attorneys and self-represented filers attend the confirmation hearing, but this varies by court. You might have to participate if the judge requires it. Creditors appear through an attorney when objecting to your plan or if another issue might impact the amount they recover.
The court relies on the Chapter 13 trustee to analyze your case and object to planning or calculation defects. Creditors can also object if your plan doesn't pay what they're entitled to receive.
The bankruptcy judge will consider whether you are using all your "disposable income" as calculated under the bankruptcy laws to fund your plan. Also, the three- or five-year plan length must be appropriate for your situation, and you must pay secured, unsecured, and priority creditors as least as much as required by bankruptcy law.
Knowing the issues the judge will address beforehand gives you time to prepare for the hearing. The trustee will likely have tried to resolve any concerns informally, filing a formal objection only after failing to reach a resolution.
Sometimes the judge can resolve issues after hearing each party's concerns and considering the law. However, the court might require each side to present testimony, documents, affidavits, and other evidence.
Below are the typical confirmation hearing outcomes you can expect after the judge reads the written objections and responses, listens to each side's argument, and considers the evidence.
The judge confirms your plan. If there are no problems with your plan, the judge will confirm it. You and your creditors must comply with the payment terms in the confirmed plan.
The judge continues the confirmation hearing. You might need more time to negotiate with creditors or amend your plan to correct errors. The judge will continue a Chapter 13 confirmation hearing to resolve problems but not to delay the process.
The judge dismisses your case or converts it to Chapter 7. If you aren't making your payments, don't have sufficient income to fund the plan, or can't propose a plan which meets legal requirements, the court can dismiss your case or convert it to Chapter 7. Because you have the right to dismiss Chapter 13 cases, most judges won't convert the matter to Chapter 7 without your agreement.
The court might consider whether to deduct your Chapter 13 payment directly from your paycheck, but this isn't available in all jurisdictions. Before the confirmation hearing, the judge usually decides other issues, such as creditor claim objections and cramdown or lien strip motions.
Bankruptcy is essentially a qualification process. The laws provide instructions for completing a 50- to 60-page bankruptcy petition, and because the rules apply to every case, you can't skip a step. We want to help.
Below is the bankruptcy form for this topic and other resources we think you'll enjoy. For more easy-to-understand articles, go to TheBankruptcySite.
More Bankruptcy Information
Bankruptcy Forms and Document Checklist
More You Might Like
We wholeheartedly encourage research and learning, but online articles can't address all bankruptcy issues or the facts of your case. The best way to protect your assets in bankruptcy is by hiring a local bankruptcy lawyer.