In contrast to Chapter 7 bankruptcy cases, which are technically liquidations, chapter 13 bankruptcy cases involve the debtor reorganizing his or her assets and liabilities through a repayment plan. No later than 45 days after the meeting of creditors, a confirmation hearing must be held to determine whether this repayment plan is feasible and it meets the standards for confirmation outlined in Title 11, the Bankruptcy Code.
Chapter 13 debtors are required to file a repayment plan of reorganization submitted for court approval that provides for payments of fixed amounts to the bankruptcy trustee regularly. The trustee then distributes these funds to creditors according to the terms of the plan. Within 30 days of filing the bankruptcy case, bankruptcy debtors must start making plan payments to the trustee. These proceeds are held in trust by the Chapter 13 trustee until confirmation.
Once a confirmation hearing has been scheduled and noticed to all parties in interest, including creditors, these parties may object to confirmation. Most creditors object on the basis that the payments delineated under the plan are less than what the creditor would receive if the debtor’s assets were liquidated, or that the debtor’s plan does not commit all of his or her projected disposable income for the plan’s applicable commitment period.
The Chapter 13 Bankruptcy trustee assigned to the case will assess and analyze whether a debtor’s plan meets the requirements of federal bankruptcy law. The trustee must approve the plan and, in the process thereof, will typically state the plan’s deficiencies and what must be done to gain approval for confirmation.
Often a debtor will fail to provide payment for the debt amount set forth in a secured creditor’s proof of claim. Or the debtor may simply fail to provide for payment to a certain creditor. Once these shortcomings are corrected by the debtor, the trustee will typically approve the plan and sign off on confirmation, which means that the judge will also approve the plan since bankruptcy judges typically defer to Chapter 13 bankruptcy trustees in these situations.
In some circumstances, prior to confirmation, the debtor may have to file an amended plan to implement the changes recommended by the trustee. A plan that must be changed after confirmation is known as a modified plan. An experienced bankruptcy attorney may provide invaluable assistance in helping a debtor have his or her Chapter 13 plan confirmed.
The Morrison Law Group strives for complete client satisfaction with the services that we provide throughout a client’s bankruptcy case, as well as the ongoing services that we provide post-bankruptcy. Not all Utah Bankruptcy attorneys can make this statement, but the Morrison Law Group is not like other Utah bankruptcy law firms. We can help if you are facing possible foreclosure or just a few months behind on your mortgage payments. Call 801.456.9933 today to schedule a FREE consultation. We have locations in Ogden, Logan, Sandy, and St. George to serve the residents of the counties of Weber, Cache, Salt Lake, Utah, Morgan, Davis, Washington, and surrounding areas.