When you file Chapter 13 bankruptcy, you must propose a plan to repay part or all of your debts. At the confirmation hearing, the bankruptcy judge decides whether your plan can be approved. Read on to learn more about the confirmation hearing, including when it is held, who attends, and what happens if your Chapter 13 plan cannot be confirmed.
The Chapter 13 Repayment Plan
In Chapter 13, you propose a payment plan for a period of three to five years. You'll make your first payment the month after filing your case. The Chapter 13 bankruptcy trustee holds the amounts until the judge confirms your Chapter 13 plan, and once approved, pays the funds to creditors.
Learn more in Chapter 13 Repayment Plan.
The Confirmation Hearing
Your Chapter 13 plan must be approved (confirmed) by the bankruptcy judge. The purpose of the confirmation hearing is for the bankruptcy court judge to determine the following:
The court will schedule the confirmation hearing within 45 days of the 341 meeting of creditors. Your creditors will receive notice of the hearing at least 28 days in advance.
If you are represented by an attorney, you don’t have to appear at the confirmation hearing, but you can if you choose to do so. If you are not represented by counsel, you must appear or risk having your Chapter 13 case dismissed.
What Happens at the Hearing?
When you appear at the confirmation hearing, you will report to the assigned judge’s courtroom. When called, the trustee or creditor will argue any plan objections that weren't resolved before the hearing. The judge will weigh the arguments and decide whether your plan meets confirmation requirements. Once confirmed, the plan is binding on both you and your creditors.
Find out more about the steps in a Chapter 13 case.
Plan Objections at the Confirmation Hearing
Your creditors or the Chapter 13 bankruptcy trustee might object to the confirmation of your plan. Common objections include:
For instance, in Chapter 13, you must satisfy all past due amounts owed to secured creditors, usually, the holders of a mortgage or car loan, if you hope to keep the property serving as collateral. Also, your unsecured debts—such as credit card balances, medical bills, and personal loans—must get paid all of your disposable income. Additionally, these creditors can’t receive less than if you had filed for Chapter 7. This is known as the “best interests of creditors” test.
In many instances, you can settle an objection before the hearing. For example, if the trustee or a creditor claims the expenses listed in Schedule J are too high, you might resolve it by providing proof of your expenses. Similarly, if a creditor claims you aren’t paying enough, you can solve the disagreement by amending your plan to increase the amount paid.
Learn more about how much you’ll pay in a Chapter 13 repayment plan. Or, find more information about how much you must pay Chapter 7 unsecured creditors in the Chapter 7 Means Test.
If the Court Confirms Your Plan at the Hearing
After confirmation, the trustee will begin paying the creditors listed in your Chapter 13 plan from the monthly payments you send in. It is crucial to the success of your case that you make timely and regular payments to the trustee. If, during your Chapter 13, you are unable to make your plan payments, contact the trustee’s office immediately. They can offer guidance about modifying your plan payments. Find out more in What Happens if You Cannot Make Plan Payments.
If the Court Doesn't Confirm Your Plan
If the court doesn't confirm your proposed plan, the trustee will return the amount paid minus any adequate protection payments made to ensure a secured creditor—usually the holder of your car payment—wouldn't suffer financially during the confirmation process (a bankruptcy requirement).