Confirmation Hearing
In Chapter 13, after the debtor attends a 341 hearing, and the bankruptcy plan is filed, the next event is the confirmation hearing where the court approves the discharge of debts if there are no creditor oppositions.
The debtor is required to attend the confirmation hearing as the bankruptcy plan is reviewed by the court and Chapter 13 Trustee. If the debtor fails to appear for the hearing, the judge can prevent or delay the confirmation.
The bankruptcy lawyer for the debtor needs to present a plan that protects debtor interests by making payments manageable, that ensures the plan will be confirmed by the court. When attending confirmation hearings, review the calendars prior to entering the courtroom to stay on track with whether a case is on the dismissal, uncontested, or contested calendar. The lawyer analyzes the parties' income and expenses, and makes certain the budget is not excessive or has frivolous expenses.
When an objection to confirmation is filed, the objecting party, or its attorney, attends the confirmation hearing. The views 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 the disputed matter (e.g. a valuation issue, a bad faith objection, a disposable income objection). Often objects relate to payments offered under the plan being less than creditors would receive if the debtor's assets are liquidated or the debtor's plan does not commit all of the debtor's projected disposable income for the commitment period.
The provisions of a confirmed plan bind the debtor and each creditor. If the court confirms the plan, the Chapter 13 Trustee will distribute funds received under the plan "as soon as is practicable." 11 U.S.C. § 1326(a)(2). If the court declines to confirm, the debtor may file a modified plan, or convert to a liquidation case under chapter 7. 11 U.S.C. § 1323. 11 U.S.C. § 1307(a). If the court declines to confirm the plan or the modified plan and dismisses the case, the court may authorize the Trustee to keep funds for costs, and return remaining funds to the debtor 11 U.S.C. § 1326(a)(2).
A discharge is provided under Chapter 13 when the debtor completely performs under the plan. The discharge releases the debtor from all debts provided for by the plan or disallowed. Creditors provided for in full or in part under the Chapter 13 plan may no longer initiate or continue any legal against the debtor to collect discharged obligations.
