Objections to Confirmation in Your Chapter 13 Case

  When we prepare and file your Chapter 13 plan, our goal is to create a three to five year payment plan that meets the requirements of Chapter 13 of the Bankruptcy Code.  When you first file your petition, your case is put into a kind of probation period - you have all the rights provided for in Chapter 13, but creditors and your Chapter 13 trustee are given the opportunity to announce objections to the provisions of your plan.

  This probation period lasts for about two months.  The probation period comes to an end at “confirmation.”  Your case is said to be confirmed when all objections have been resolved and the judge removes the probation status.

  When you receive a copy of the Notice of Commencement of Case, you will see several hearing dates noted.  Your 341 hearing will be held about a month after you file.  The confirmation hearing date will be about two to three months after you file.  While you will have to attend your 341 hearing, there is a good chance that you will not have to attend the confirmation hearing.  Our office regularly deals with objections to confirmation and most of the time we can work out a compromise with your trustee or with creditors.  Sometimes you will need to attend the confirmation hearing so you should be prepared to come to court, but don’t be surprised if we get everything resolved at the last minute.

Typical Objections to Confirmation

  During the pre-confirmation probation period, your trustee and creditors have the right to file “objections to confirmation.”  These objections take the form of pleadings that identify issues of concern to the objecting party.  The objection will usually conclude with a request that the judge dismiss your case.

  While you should carefully read any objections to confirmation in your case, Clark and Washington advises you not to get upset with what you see.  Every day, we get calls from frantic clients who wrongly believe that their case has been dismissed because of what they see in an objection to confirmation.  You can save yourself a lot of stress by understanding that an objection to confirmation does NOT mean that your case has been dismissed.

  What are some typical objections to confirmation?:

1. Funding - the #1 objection to confirmation has to do with the funding of your case.  The minute your case is filed, you have an immediate obligation to pay the trustee.  The first month’s payment is due 30 days from the date you file.  If your employer does not set up a payroll deduction right away, your paycheck issued two weeks after we file may not have a Chapter 13 withdrawal.  At Clark and Washington, we advise our clients to take personal responsibility for making all Chapter 13 payments.  Even when the payroll deduction kicks in, you are still the responsible party to make sure that money withheld is actually sent in.  If you have any questions about how much money should be in the trustee’s account, call our office!  If your case is not properly funded, it will be dismissed.
    
2. Term - the maximum length of a Chapter 13 case is 60 months (5 years).  If creditor claims come in higher than expected, or if certain means test calculations so dictate, your current plan payment may cause your case to run longer than 60 months.  If this happens, the trustee will file a “terms” objection.  We can usually fix a terms objection by increasing your Chapter 13 plan payment.
    
3. Treatment of a creditor in your plan - as your attorneys, our goal is to create a plan that you can live with.  We represent you, not your creditors.  Your creditors, on the other hand, want to get paid as much as they can as fast as they can.  Sometimes creditors object to how your plan treats their claims.  We can usually negotiate a compromise to this type of objection.
    
4. Means Test Objections - under the current bankruptcy law, we are required to run an analysis of your household income over the six month period of time prior to the month we filed your case.  For example, if you filed your case in March, we would run a means test analysis using income data from September through February.  The means test is not really a budget - it requires us to plug in expenses that come from the IRS.  As you might imagine, an IRS designed budget is not very generous.  The means test is designed to generate a number that reflects a reasonable payment to creditors.  But the means test does not take into account changes in income, the effect of one time bonuses, new expenses, etc.  If we receive a means test objection in your case, we will have to negotiate a settlement with the trustee or argue your case to the judge.

There are a number of other types of objections, most of which can be resolved with simple amendments.  Since almost every Chapter 13 case has objections, we are fully staffed and prepared to deal with those objections.  At Clark and Washington, we have set up teams that are assigned to cases based on the judge and based on the trustee.  You can be certain that we will be prepared to deal with each and every objection that is filed in your case.