A Chapter 13 confirmation hearing determines whether the bankruptcy judge approves your Chapter 13 Plan. At the hearing, the bankruptcy judge will determine if your plan meets the requirements of Chapter 13. Confirmation is a big step in the Chapter 13 process. Plan confirmation serves as a formal approval of your plan. It locks it in stone so-to-speak. This is a big milestone in Chapter 13 because you normally get certain privileges back when your plan is confirmed. You can start rebuilding your credit, for example. It also makes it easier to get a new car.
Let’s discuss what happens at a Chapter 13 confirmation hearing.
Do I need to go to court for my Chapter 13 confirmation hearing?
Not usually. In most cases, your Chapter 13 lawyer would already know if your Chapter 13 plan meets the requirements for confirmation. Normally, your attorney would have already discussed any issues with the Chapter 13 trustee and any creditors. Only in rare circumstances would your attorney need you to attend the Chapter 13 confirmation hearing and only in rarer circumstances would you need to testify at that hearing.
We advise our clients to assume that they do not need to be present unless we specifically call them an advise them to be there.
What happens if someone objections to my Chapter 13 confirmation?
It is very common for a creditor or the Chapter 13 trustee to object to confirmation. It happens in just about every case. An objection informs the bankruptcy judge that there is an issue with the Chapter 13 plan. Sometimes it is simple. For example, if you’re trying to repay your mortgage arrears in the Chapter 13 plan, you may have gotten the amount wrong. Your plan may propose to pay $10,000 to the mortgage company when you actually owe $11,000. This would likely cause the mortgage company to object.
When someone objects to confirmation, your Chapter 13 attorney will address the issue. We handle these issues in a number of ways. Sometimes, we amend the Chapter 13 plan to correct the issues. Sometimes we amend other schedules or statements. In other cases, we may simply have to provide the trustee with additional information (such as updated pay stubs).
Objections are simply part of the process. They are normally nothing to worry about. You should not be concerned about an objection unless your attorney tells you that you should be concerned.
What happens at a Chapter 13 confirmation hearing?
Most courts have a “Chapter 13 day”. On Chapter 13 day, the bankruptcy judge may try to resolve 50 to 100 Chapter 13 cases. You can imagine that with this kind of volume, things move quickly. Most cases are resolved prior to the hearing. In such a case, the judge may read the name of the case and read what happened. For example, “in #52, the Smith case, the matter is continued for 30 days”.
There are a number of quick resolutions at the confirmation hearing. Many times the hearing is continued (postponed) so that your attorney can provide additional information, amend the schedules, or amend the Chapter 13 plan. This is a common resolution in many courts.
Other courts allow us to have objections “sustained”. This means that we agree that the plan needs to be corrected and that we’re asking for time to amend it. We would normally say that the objections are sustained with an amended plan due in ___ days. 30, 60, or 90 day windows are common depending on the complexity of the case.
In very rare circumstances, there is an actual “hearing” with testimony. In these cases, your attorney should prepare you ahead of time. You will have to testify that your plan meets the requirements of Chapter 13. Don’t worry though, your attorney will walk you through this. Most of the time, the issue is narrow. There may be a small dispute over some language in your plan that needs to be resolved. There may be a dispute over whether you can afford a higher payment. When the issues are narrow, you should only have to testify about that small issue.
What happens if my Chapter 13 confirmation is denied?
Sometimes, a judge will deny confirmation. That means the judge does not believe that the proposed plan meets the requirements of Chapter 13. In this case, the judge will ordinarily allow you to amend the plan and will provide a time frame for doing that. The judge may say “confirmation is denied with an amended plan due in 30 days”, for example.
If the judge allows you to amend your plan, this is a simple remedy. In some cases though, the judge will not allow you to amend and may instead dismiss your case. This is rare. It would normally only happen in cases where you are abusing the process or refuse to comply with the requirements of Chapter 13. Most judges will give you a few chances to amend your plan before they will consider dismissing your case.
Amending your Chapter 13 Plan is not the end of the world
I cannot stress enough that amending your Chapter 13 plan is simply part of the process. It is not a problem and it happens in almost every case. That is because it is impossible for lawyers to predict certain things. We cannot predict how much you may owe in back taxes or in child support. We cannot predict how much you will need to repay to the mortgage company. Even if we can guess very closely, we may still need to amend to match the exact figures.
This isn’t a problem. It’s part of the process.