Chicago Bankruptcy Question: What is an objection to confirmation in a Chapter 13?

Chicago Bankruptcy Question of the Day: What is an objection to confirmation in a Chapter 13?  When you file for Chapter 13 bankruptcy protection, you must file a series of schedules detailing your financial position (your bankruptcy petition), a schedule of your recent financial history (your Statement of Financial Affairs), a plan of reorganization and a Statement of Current Monthly Income (means test).  All of your creditors are given notice of your filing and an opportunity to review these documents.  Additionally, you must attend a Section 341 Meeting of Creditors with your trustee, at which your schedules and plan are reviewed in detail by the trustee.  After your meeting of creditors, a confirmation hearing is set wherein your case must be approved by the bankruptcy judge before it is finalized.

Prior to this confirmation hearing, any interested party may file an objection to confirmation of your Chapter 13 bankruptcy plan of reorganization.  This is a statement filed with the bankruptcy court stating that there is an issue with your schedules or your plan and that the moving party does not believe that your case should be approved by the court.  Notice of this objection is given to your bankruptcy attorney and to you so that these objections can be addressed.

Objections to confirmation generally come from one of three sources.  The most common objection to confirmation comes from the trustee assigned to your case.  These objections are not always put in writing, as they can be put on the record at your 341 Meeting of Creditors, but are nonetheless effective and must be addressed prior to confirmation.  Common trustee objections include claims that income is inaccurately represented, expenses are unreasonably high, the proposed plan is not the debtor's best effort to repay creditors and that clerical mistakes were made in the preparation of the debtor's schedules.

Another very common objection is that of a creditor secured by real property, such as your residence.  This is usually the mortgage company or homeowner's/condominium association claiming that the arrearage amount proposed to be repaid in the plan is understated or that the current monthly payment to them is inaccurately scheduled. 

A final common objection is that of a creditor secured by personal property, such as an auto finance company or furniture finance company.  Their objections generally claim that the value stated in the petition for their collateral is understated, the interest rate being paid to them is insufficient or the monthly payments allocated to them in the plan are insufficient.  There are other types of objections to confirmation of a Chapter 13 plan, but these three are by far the most common.

Objections to confirmation can usually be resolved by your bankruptcy lawyer prior to the scheduled confirmation hearing.  Some require negotiation with the trustee or creditor while others simply require an amendment to your petition and/or plan of reorganization.  When you receive an objection to confirmation, make sure that you read it so that you understand what is being objected to, then call your bankruptcy attorney so that they may explain to you how it will be resolved and what effect that resolution will have on your Chapter 13 plan.

Representation of an experienced Chapter 13 bankruptcy lawyer is essential in the confirmation process.  A good bankruptcy attorney will prepare your schedules, petition and plan without any significant clerical mistakes.  They will aggressively represent your best interests when it comes to negotiating with the creditors and the trustee to ensure that you are in the most effective and cost efficient plan possible and they will explain any required amendments and changes to your plan payment completely so that you are comfortable with the changes being made.  The bankruptcy lawyers at Ledford & Wu have years of experience with Chicago area Chapter 13 bankruptcies and will always look out for your best interests.  Feel free to contact us for a free consultation today.

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