20 Sep The Chapter 13 Process (Part 3)
In parts 1 and 2 we looked at collecting all the necessary information; getting it to a competent attorney; and the preparation of the petition, schedules, statement of financial affairs and plan. Once the paperwork is prepared and signed it can be filed with the court.
The next step is usually the meeting of creditors or 341 hearing. This is a required appearance by the debtor(s) and their attorney in front of the trustee assigned to the case. It is nothing to be frightened of, but usually just a formality to allow the trustee to clarify the schedules, statement of financial affairs and the plan provisions. It also gives any creditors a chance to question the debtor something that rarely happens.
Mainly, what the trustee does at this meeting is be introduced to the debtor(s), explain some of the parameters of the Chapter 13 process, and make sure that the formalities of the paperwork have been met. Often the trustee will inquire as to the feasibility of the plan (whether or not the debtor can afford the payments), and whether the creditors have been provided for in the plan according to law.
It is not unusual for the trustee to have some concern with the plan as filed. Sometimes, debts are characterized differently than the trustee wants, sometimes the trustee believes that the debtors can afford to make larger payments into the plan, and sometimes the trustee will question if the plan will work at all.
In part 4 we will examine the confirmation process.
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