Important Dates in Chapter 13 Cases – Part 4

29 Oct Important Dates in Chapter 13 Cases – Part 4

The last date creditors can file objections to confirmation in a Chapter 13 case is usually 5 business days prior to the confirmation hearing date.

Objections to confirmation can be filed by the Trustee or a creditor. Trustees will often object for the following reasons, among others:

1) If all the debtor’s disposable income is not scheduled to be paid into the plan.

2) If the plan is not feasible, which means that the amount scheduled to be paid into the plan is not enough to pay the creditors in the manner listed in the plan.

3) If the unsecured creditors would get paid more if the bankruptcy was filed as a Chapter 7. This is called the “best interest of creditors” or liquidation” test.

4) If the proposed plan does not meet one of the requirements of the bankruptcy code. An example would be if an above median income debtor proposed a less than 100% plan for fewer than 60 months.

Objections to confirmation filed by creditors are often for some of the following reasons:

1) The proposed plan values the collateral for their secured loan for less than what they believe to be the true value of the property.

2) The interest rate proposed by the plan for their secured loan is less than the creditor feels it should be under the law.

3) The amount of the arrears on their secured loan (a mortgage for example), understates the actual amount of the arrears.

4) The proposed plan treats their claim differently than the creditor believes it should be treated.

Debtors sometimes are under the mistaken impression that if a creditor does not attend the meeting of creditors, that creditor cannot file an objection to confirmation. They can and often do.

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Peter Orville is a bankruptcy lawyer in Binghamton, located in the Southern Tier of New York. He is a member and New York co-chair of the National Association of Consumer Bankruptcy Attorneys.
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