Objections to Proposed Chapter 13 Plans
Are you considering a Chapter 13 bankruptcy filing? If so, it is important to know that part of any Chapter 13 bankruptcy case is to draft a repayment plan designed to last three to five years. The aim is for the repayment plan to allow priority creditors to be repaid in full over the course of the plan, secured creditors to be repaid at least the value of any collateral, and for other creditors to be repaid at least what they would have received if you had filed for a liquidation bankruptcy instead. The repayment plan must be filed either with your original bankruptcy petition, or within 14 days from the date that your bankruptcy petition is filed. The plan you propose will need to be submitted to the court, and the court will need to approve the plan.
There will be a confirmation hearing, at which time the court will decide whether or not the plan you have submitted is feasible and whether it complies with the requirements discussed above. In some cases, a trustee will object to a proposed plan or the court will decide not to approve a plan as it has been submitted. What are the reasons for objections? Our West Palm Beach bankruptcy lawyers can explain.
Missing Financial Documents
If you are missing any financial documents, including required schedules, statements, or tax returns, there will likely be an objection to your plan. Usually, this type of issue can be resolved relatively quickly if the materials were left out erroneously.
Priority Debts Would Not Be Repaid in Full Under the Terms
If all priority debts will not be repaid in full under the terms of the repayment plan, you should anticipate an objection. The plan cannot be approved by the court if this is the case.
Plan is Not in the Best Interests of Creditors
A Chapter 13 repayment plan must be in the best interests of the creditors based on the debtor’s assets and disposable income, and available exemptions. If non-priority creditors are not repaid at least an amount they would receive if the debtor’s non-exempt assets were liquidated, the plan is unlikely to be confirmed and objections will arise.
Debtor’s Income is Inadequate to Make the Plan Feasible
If a debtor does not have sufficient income to make the proposed repayment plan feasible, it cannot be approved by the court.
Debtor Has Failed to Make Payments
Before a repayment plan is approved, a debtor must actually begin making payments on it — within 30 days after filing the bankruptcy petition. If a debtor has already failed to make payments by the time of the confirmation hearing, the trustee is likely to object.
Contact Our West Palm Beach Bankruptcy Attorney Today
Bankruptcy cases in the United States are extremely complicated, whether you are filing for individual bankruptcy or business bankruptcy. There are a wide range of issues you will need to consider and plan for, including objections that the trustee may raise in certain bankruptcy cases. If you have any questions about bankruptcy in South Florida or if you need assistance with your case, one of the experienced West Palm Beach bankruptcy lawyers at Kelley, Fulton, Kaplan & Eller can assist you. Do not hesitate to contact us to find out more about the services we provide to individuals and businesses alike in South Florida.
Source:
law.cornell.edu/uscode/text/11
