Chapter 13 functions as a way to restructure your personal financial affairs. In many cases, we can balance your budget by reducing your monthly payments to creditors, and we can reduce or even eliminate some of your debt.
Chapter 13 can also help you keep at risk property – we can use this personal reorganization bankruptcy to stop home foreclosures, stop vehicle repossessions, halt wage garnishments and put you back on the road to financial health. As powerful and potentially beneficial as Chapter 13 may be, it can be difficult to get your repayment plan approved and it can be a challenge to keep your plan current over a period of years – often 5 years. Here are some of the problems we will need to overcome in our efforts to reorganize your finances under Chapter 13.
Our immediate goal after filing Chapter 13 is to get your Chapter 13 plan confirmed, or approved by the bankruptcy judge. Generally, a hearing on the confirmation of your plan will be scheduled between one and three months after we file your case. In other words the first one to three month period after we file your case is kind of a probation period that allows the judge to see if you will be able to make a personal reorganization work. Immediately after we file your case, your obligations under Chapter 13 begin. This includes such things as:
sending your plan payment to the Chapter 13 trustee
paying all post-petition mortgage payments (if your plan so provides)
paying all post-petition lease payments (if your plan so provides)
filing all tax returns as they become due
In addition the pre-confirmation “probation” period allows the Chapter 13 trustee and creditors an opportunity to review your petition and plan and to file written objections to your plan.
Almost every Chapter 13 case will generate objections – our job is to convince the trustee and creditors to withdraw their objections prior to the confirmation hearing. If we are successful in resolving all objections your bankruptcy judge will confirm your plan and you will be on the path towards receiving your Chapter 13 discharge of debts.
Some of the objections to confirmation we may face include:
funding – you have not made all payments to the trustee as required by your plan
term – as currently configured your plan is running more than 60 months (5 years)
adequate protection – a creditor may object on the grounds that monthly payments to that creditor are too low
missing information – your Chapter 13 schedules are not complete or need explanation
proof of payments – often trustees want to see proof that you are making required direct payments to your mortgage lender, a child support creditor or student loan creditor
failure to provide for payment to a particular creditor in your plan
failure to provide for expected changes in income or expenses
failure to provide for expected tax refunds in the future
As you can see, some of these objections are relatively minor in the sense that we only need to provide copies of documents, whereas some are more significant and may require that we increase your plan payment or otherwise modify your case.