A Chapter 13 bankruptcy case is considered a reorganization and typically lasts longer than a Chapter 7 bankruptcy case. Filing a Chapter 13 bankruptcy case begins a process that typically takes between three and five years to complete. It requires bankruptcy debtors to propose a plan of reorganization to repay some portion of their unpaid debt obligations over this 36- to 60-month period.
For a Chapter 13 case to succeed, debtors must have their proposed plans of reorganization confirmed by the United States Bankruptcy Court. Experienced bankruptcy counsel may ensure that debtors fulfill all legal requirements and have the best chance going forward of having their Chapter 13 plan confirmed.
The confirmation of a Chapter 13 repayment plan is the step where a Chapter 13 plan is finalized. Before this plan is finalized, a window of time exists for creditors and other parties in interest to object to its terms. Once this objection period closes, the court holds a confirmation hearing to determine whether the debtor has proposed a viable plan within the requirements of the law and resolved any creditors’ objections.
Creditors object to a Chapter 13 plan if they believe the amount provided in the plan is insufficient to adequately pay their claim isn’t enough. Often, vehicle lenders object because they disagree with the debtor’s valuation of how much a motor vehicle is worth.
Trustees object to Chapter 13 plans when debtors fail to abide by the requirements of the Bankruptcy Code and Chapter 13. They may object when debtors fail to provide for a secured claim or do not pay a creditor the debt’s balance as stated in the creditor’s proof of claim.
Debtors must then lodge an order to confirm their plans with the trustee and court, both of which must approve the plan of reorganization. Prior to this, the trustee will send the debtor an analysis of what needs to be done to gain trustee approval. If the debtor accomplishes what the trustee has requested, the trustee will sign off and the bankruptcy court will do the same. However, a creditor who disagrees with the trustee’s findings may appear at the confirmation hearing and request to present its argument against the confirmation of the debtor’s plan.
If some party objects to a repayment plan, the judge will decide the issue at the confirmation hearing unless the judge decides to give the parties some time to work out a settlement, thus requiring them to return to court for another hearing. Of course, there may be no objections to a plan of reorganization, but the judge may have questions about the plan. Having experienced bankruptcy counsel at your side may make this process seem effortless.
Many bankruptcy debtors have a choice between filing a Chapter 7 bankruptcy case and Chapter 13 bankruptcy case. There are many differences between the two chapters. An experienced Morrison Law Group attorney can help you determine which is best for your financial situation. Call 801.456.9933 today to schedule a FREE consultation and discuss your complete set of options. 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.