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What does a Chapter 13 confirmation hearing entail?

Filing for bankruptcy requires careful attention to detail as a debtor and his or her attorney compile information about a debtor's assets and outstanding debts. The filing of a bankruptcy petition sets a number of events into motion. Specifically, for a Chapter 13 bankruptcy filing, a debtor must file a repayment plan with the court.

The repayment plan, which shall include information regarding planned payments to the appointed bankruptcy trustee on a regular basis, must be filed within 15 days after the original bankruptcy petition is filed. Before a debtor begins making payments specified in a repayment plan, however, the court must approve the plan in what is known as a confirmation hearing. In a confirmation hearing, a bankruptcy judge will determine whether a debtor's repayment plan is feasible, and whether it meets required Bankruptcy Code standards.

A debtor's creditors will be notified of the confirmation hearing and may object to confirmation of the repayment plan. A creditor who objects may contend that the plan does not call for sufficient payments to that creditor because either all of a debtor's disposable income has not been counted for the appropriate period or that the creditor would receive more if the debtor's assets were liquidated.

After a repayment plan is approved in a confirmation hearing, a trustee then has the authority to distribute the funds received promptly. Fortunately, if the court does not confirm a debtor's plan, a debtor has the option to modify the plan and refile it with the court. A debtor who has filed for Chapter 13 bankruptcy and is facing an upcoming confirmation hearing, or who is considering filing for Chapter 13, may wish to consider seeking the counsel of an attorney for guidance.

Source: FindLaw, "Chapter 13: Repayment Plan and Confirmation Hearing," accessed Jan. 29, 2016

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