What Is The Chapter 13 Confirmation Hearing?
A Chapter 13 is different from a Chapter 7, because a Chapter 13 involves reorganizing and setting up a payment plan to pay off all of the person’s debts. There is a meeting of creditors in a Chapter 13, just like there was for the chapter 7, but in this case the Chapter 13 trustee would not be interested in what assets the person had, because they would be interested in what income the person had to be able to set up a payment plan to pay off their debts.
Obviously, the more income someone has the more money the trustees would want to have paid into the plan every month. The judge would decide how much the payment plan would be at the confirmation hearing, and the attorney would work with the Chapter 13’s trustee to come up with a payment plan.
In case of a disagreement where the trustee feels that the person should pay more and the attorney argues that the person should pay less, then in that case the person would have to go in front of a judge and have the judge decide exactly how much the person would have to pay in a Chapter 13. The confirmation is whether the court wants the person to improve their plan to pay off all their creditors and get a fresh start.
Who Presides Over The Chapter 13 Confirmation Hearing?
The Chapter 13 confirmation hearing would be in a courtroom and the attorney would often talk to the Chapter 13 trustee so they could work out any details of the case and get it approved so that everybody agrees on the numbers, without having to actually go in front of a judge.
Occasionally, if there is a dispute over how much should be paid, then the parties would have to go see the judge, so that the judge and the Chapter 13 trustee could argue as to why the person should be paying a certain amount whereas the attorney would make an argument about how much he thinks the person should be paying. The judge would decide exactly how much the person should pay to be able to get their Chapter 13 approved or confirmed.
How Long Does The Chapter 13 Confirmation Hearing Typically Take?
A Chapter 13 confirmation hearing can take anywhere from five minutes to an hour or two hours, although generally, if it looks like it would drag on for more than a few minutes, it could be shifted to a harder Chapter 13 confirmation hearing which could be scheduled to a different time.
The judge would often stop right here and specially designate a date and time when this would be the only case in the docket if it seemed like the hearing would drag on for a long time and there were a lot of issues and a lot of different things like testimony that needed to be put on, so that he could devote between an hour and a half to two hours to really address all the issues in that particular case. The issue is pretty straightforward in most cases, and it would only take a few minutes in front of the judge to handle it, so the judge would make a decision and he can move on.
What Happens Immediately After The Chapter 13 Confirmation Hearing?
The person would be good to go if their case got confirmed or proved, and there would be no issues if the person made their payments under the plan and made all of the payments on their house or their car, although unfortunately, a lot of times people are actually struggling.
Someone who files a Chapter 13, stays or stops all of their creditors from foreclosing or repossessing the house or repossessing the car, so the creditors would not really be able to do anything to the person as long as they made the regular payments after filing a Chapter 13, although if they fell behind, then the creditors could file a motion for relief from the stay. They would go to the court and state that the person was supposed to be making their car or mortgage payments, but they were not doing that, so they would request relief from the bankruptcy so they could foreclose or repossess the car.
The good news is that a second payment plan can often be agreed with the mortgage and with the car companies to give the person a second chance to try to catch it up, but it can become very difficult if the person struggled with any problem.
What Are The Differences Between The 341 Meeting and the Chapter 13 Confirmation Hearing?
It is the trustee’s goal in a Chapter 7, 341 meeting, to find assets that he can sell to pay off some of the debts. The most common assets are tax refunds, cars that have been paid for, lawsuits the person may have a right to pursue against somebody else, and inheritances if somebody died and left the person money, because that would become part of the Chapter 7 bankruptcy.
None of those issues would really matter in the 341 meeting of creditors for a Chapter 13. The trustee in a Chapter 13 would be more interested in seeing that the person had a steady income and that they had the ability to make payments. He would be interested in how much those payments should be, because the more income the person had, the more the Chapter 13 trustee would want to see paid towards the creditors every month.
The Chapter 7 and Chapter 13 trustees look at the case in different ways. It really would not matter what the person owned in a Chapter 13, because they would not lose anything and they would just be reorganizing. The only issue where assets and income may come up in a Chapter 13 is during the Chapter 7 liquidation test.
If someone filed a Chapter 13 but had some significant assets, then they would have to pay in the Chapter 13 as much as they would have gotten if they had filed a Chapter 7, so, even though the person would not be filing a Chapter 7, they would have to calculate how much their creditors would get in a Chapter 7 and pay that amount in a Chapter 13. If someone had $6,000 worth of assets that they could not protect in a Chapter 7, then in the Chapter 13, the person would have to pay $100 a month at least in order to pay that $6,000.
The main difference between the two is that in a Chapter 7, there are some assets involved and in a Chapter 13, there is some income involved.