In Chapter 13 bankruptcy, after the debtor attends a 341 creditors’ meeting, and the bankruptcy plan is filed, the next hearing is the confirmation hearing where the court approves the repayment plan if there are no creditor oppositions.
In most instances, the debtor is required to attend the confirmation hearing. The bankruptcy plan is reviewed by the court and Chapter 13 Trustee. The court usually listens to the recommendations of the Trustee. If the debtor fails to appear for the hearing, the judge can dismiss the case, or delay the confirmation.
The bankruptcy attorney for the debtor needs to present a repayment plan that protects debtor interests by making payments manageable, and ensures the plan will be confirmed by the court. Prior to attending a confirmation hearing, the debtor can review the calendars posted outside the courtroom or on the bankruptcy court website to learn the order the cases will be called. Several cases may be heard at the same time. All hearings are public.
A case may be put on one of three calendars: dismissal, uncontested, or contested. A dismissal usually occurs when a debtor does not file proper paperwork or answer objections from a Trustee. Uncontested means there are no objections from the Trustee or creditors to a repayment plan. Contested means there are objections to a plan. The lawyer analyzes the debtor’s income and expenses, and ensures the budget is not excessive or has frivolous expenses when coming up with a viable repayment plan.
The arguments of the objecting parties and the Trustee are heard by the judge. The judge confirms the plan, denies confirmation, or sets an evidentiary hearing on any dispute. There may be disputes on valuation, disposable income, or payments offered under the plan being less than what creditors would receive if the debtor’s assets are liquidated.
A confirmed plan binds the debtor and each creditor. If the court confirms a plan, the Chapter 13 Trustee distributes funds received under the plan. If the court declines to confirm, the debtor may modify a plan, or convert to a liquidation under Chapter 7. See 11 U.S.C. § 1323. 11 U.S.C. § 1307(a). If the court declines to confirm the plan or a modified plan, the court may dismiss a case, and authorize the Trustee to keep funds for costs according to 11 U.S.C. § 1326(a)(2).
After a debtor performs under a play, the court discharges the remaining debt, releasing the debtor from all debts disallowed. Creditors provided for in full or in part under the Chapter 13 plan may no longer collect from the debtor discharged obligations.
To learn more about what happens at a confirmation hearing, contact an experienced New York bankruptcy attorney.