What is a Chapter 13 Confirmation Hearing?
When you are considering a Chapter 13 bankruptcy filing, it is essential to understand how the Chapter 13 plan and subsequent confirmation hearing will work. As a type of reorganization bankruptcy designed for individuals, Chapter 13 bankruptcy gives individuals an opportunity to reorganize debt with a repayment plan, which makes up the center of the bankruptcy case. In order for a debtor to move forward with the terms of a Chapter 13 repayment plan, the bankruptcy court must approve it, and that occurs during the confirmation hearing. Our West Palm Beach bankruptcy attorneys can provide you with more details, and we can speak with you today if you are ready to begin working on a Chapter 13 bankruptcy petition and a repayment plan.
Understanding the Repayment Plan
To understand how and why a confirmation hearing is part of a Chapter 13 bankruptcy case, it is essential to know about the required repayment plan that is central to any Chapter 13 bankruptcy case.
When a person files for Chapter 13 bankruptcy, they are required to file a repayment plan either with their initial bankruptcy petition, or within 14 days from the date that they filed the bankruptcy petition. Taking into account the debtor’s disposable income and exemptions, the repayment plan must outline a plan — to last for three to give years — in which the debtor will make regular payments to the trustee in order to repay debts.
Typically, payments are made to the trustee on a biweekly or monthly basis. The total amount repaid over the period of three to five years must include the full amount owed for priority claims and the value of any collateral the debtor wants to keep. In addition, unsecured creditors must receive at least the amount they would have received in a Chapter 7 case (unsecured creditors do not need to be repaid in full). At the end of the terms of the repayment plan, remaining debt can be eligible for discharge.
How the Confirmation Hearing Works
The confirmation hearing is where the court considers the debtor’s proposed repayment plan. This part of the bankruptcy process will occur no later than 45 days following the meeting of creditors. At the confirmation hearing, the bankruptcy judge must determine whether the debtor’s repayment plan is feasible, and whether it meets requirements under US bankruptcy law.
Creditors can come to the confirmation hearing and object (although this does not usually happen unless the creditor is set to receive less than what they would have if the debtor had filed for Chapter 7 bankruptcy, or unless the debtor has not planned to pay all disposable income toward the repayment plan).
If the court does not confirm the plan, the debtor can usually file a modified repayment plan, and the court can again consider it. If a modified plan is not confirmed, the bankruptcy court can dismiss the case.
Contact a West Palm Beach Bankruptcy Lawyer Today
Chapter 13 bankruptcy is beneficial for many types of individuals in Florida who earn a wide range of incomes and are in varied professions. The repayment plan allows debtors in West Palm Beach to get caught up with creditors on many kinds of debts, including mortgage debt and other types of secured debt. Accordingly, a Chapter 13 payment plan can give you a chance to catch up on your mortgage payments if you are behind and, ultimately, to avoid foreclosure. Whether you have questions about filing for Chapter 13 bankruptcy in general or need assistance with your petition, an experienced West Palm Beach bankruptcy attorney at Kelley, Fulton, Kaplan & Eller can begin working with you today.
Source:
uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-13-bankruptcy-basics
