Chapter 13 bankruptcy cases function as payment plans.   You send money to your Chapter 13 trustee and the trustee disburses funds received to creditors.   You and your attorney are responsible for creating and submitting a proposed payment plan to the Chapter 13 trustee when you file your case, however the trustee is not the final decision maker about your plan – that decision is left up to the bankruptcy judge.  The formal approval of your Chapter 13 plan is called a “confirmation.”

Your Chapter 13 trustee does play an important role in the processing of your plan because the trustee makes a recommendation to the judge as to whether your plan should be confirmed (approved) or rejected.  In most cases, our goal is to secure a recommendation in favor of confirmation from the trustee.   However, in some cases, we will have no choice but to oppose the trustee and argue on your behalf to the judge.  This hearing about your plan is called your “confirmation hearing.”

Creditors can also object to the confirmation of your plan.  Here, too, we use the “pre-confirmation” period (usually a month or so after filing) to negotiate with creditors over any objections.  Ideally, we will work out a deal whereby your creditors withdraw their objections to confirmation, so that your plan is confirmed by the judge without objection.

What Type of Objections Might I Face?

There are any number of objections to confirmation that you may face.  Remember, however, that just because a creditor or the trustee has filed an objection to confirmation, your case has not been dismissed.  Only the judge can dismiss your case, and that almost always happens at confirmation, and we will know if and when that might happen.  Common objections to confirmation include:

• Funding – if you have not paid into your plan as set out in that plan
• Term – Chapter 13 cases can last no more than 5 years – if creditor claims come in higher than expected, you may face a term objection because your case is running 61 months or longer
• Failure to treat one or more creditors in the plan – your plan should direct the trustee how to treat all creditors. If a creditor gets left out the trustee will object
• Demand for higher trustee payment – not surprisingly both trustees and creditors will look at your budget to see if there is any more “disposable income” available.  They may argue that you are spending too much for food, transportation, home maintenance or other budget items.   We may have to show proof of expense payments in the form of receipts or bills.

Usually, if a case is feasible, we will be able to get our clients’ plans confirmed without the need to argue before the judge at a confirmation hearing.  Your Clark & Washington lawyer will advise you if you need to appear at the confirmation hearing.