In a Chapter 13 case, a lot of emphasis is put on getting your case “Confirmed” or having a successful “Confirmation” hearing. But what exactly is confirmation, and why is it so important? I’d like to take this blog to explain the confirmation process and why its one of the most important but least well-known parts of Bankruptcy.
Simply stated, confirmation is the process of getting your Chapter 13 plan officially approved by the Court. When you file a Chapter 13 case, you must also propose a plan for how you intend to repay your creditors. The plan lays out which creditors are going to get paid, when they can expect payment, and how much of their debt is going to be paid back. After filing a Chapter 13 case, the Court will set a date for confirmation of your plan. This will typically be within 60 days of filing your case, and most courts will strive to confirm your case as quickly as possible.
Why Confirmation Is Important
Successfully confirming a case is one of the most important parts of your case. Until your case is confirmed, your creditors are only paid small amounts, called “adequate protection.” They don’t start to receive regular payments until your case is confirmed. So you definitely want your case confirmed so that the payments you make can go where they are supposed to go.
Confirmation is also the first necessary step toward getting a discharge of your debts. Think of the Judge’s Confirmation Order as a statement saying “As long as you finish the payment plan you’ve proposed, you’ll be eligible for a discharge.” If nothing needs to change after confirmation and you complete you payment plan, you’ll be able to get a discharge of your debts without having to go back for any other court hearings.
Confirmation generally takes 60 days because your case can go through changes in the beginning months. During the period leading up to confirmation, your creditors will be filing claims to specify the type and amount of debts they are owed. The Chapter 13 trustee will also be reviewing the case to see if he or she needs any additional information or documentation as required by the Bankruptcy Code. The Trustee is also responsible for representing the interests of small creditors who may not find it cost effective to hire their own representatives to come to court on your case. If your plan doesn’t propose fair treatment to a particular creditor or class of creditors, you can expect the Trustee to object.
It is normal for issues to come up during the confirmation period that may require you to file a new Chapter 13 plan, but Amendments are typically allowed prior to confirmation without too much difficulty. The Confirmation Order is what locks a plan in place. After confirmation, modifying your plan will take a lot more effort, including a hearing before the Judge and an explanation of why the Judge should allow you to change a plan he or she has already approved.
At Bond & Botes, handling all aspects of a Chapter 13 case from filing to confirmation to discharge is part of our everyday activity. Our experienced attorneys have years of practice drafting Chapter 13 plans and negotiating with creditors and Trustees to get our clients’ plans confirmed. If you are having financial trouble please don’t hesitate to contact one of our convenient locations in Alabama, Mississippi, or Tennessee. We offer free initial consultations to help you get back on the right financial path.