Roughly 30 days after filing your chapter 13 case you will have to attend a meeting of the creditors where you will meet with the chapter 13 Trustee Thomas P. Gorman. In 99 percent of cases no creditors will be present at this meeting and you will spend about two minutes answering a few questions by Mr. Gorman. After the hearing concludes most clients want to know: Now what? The answer is it depends.
The ball is now in the hands of the chapter 13 trustee. If he has absolutely no objections to your case (for example, you filed a “100 percent plan” and crossed all of your “t’s” and dotted all of your “I’s”) then things remain quite for about one month and then the case is confirmed by the bankruptcy judge. Confirmed simply means that the payment structure that you chose in your chapter 13 plan is approved by the bankruptcy court. A confirmation order will then be issued by the bankruptcy court.
On the other hand, if the chapter 13 trustee has a “problem” with your case he will file an Objection to Confirmation of the Plan. He will usually do this within about two weeks after the meeting of creditors takes place. The trustee must file his objection to confirmation no later than seven days prior to the confirmation hearing date. If he does not do so then the case gets confirmed.
The typical objections that the trustee will assert is that he simply does not believe that you are proposing to pay enough money to the creditors in light of your disposable income, that the plan is underfunded due to the fact that your monthly payments are not enough to pay out all the creditors the amount that you are proposing, or you have a feasibility problem. Meaning, despite your good intentions, he simply does not believe that it is realistically possible for you to pay your creditors the amount proposed since you simply do not have the income to support such payments.
The important thing to remember is that an Objection to Confirmation of The Plan by the trustee does NOT mean that your case is doomed or is about to get dismissed! If you feel that the trustee’s objections are improper or unfounded then you can respond in writing to the objections and appear in court on the date of confirmation and explain to the bankruptcy judge why the trustee is wrong. If the judge agrees with you then the objections by the trustee will be overruled and the case will get confirmed by the judge.
On the other hand, if you agree with the objections by the trustee you can consent to denial of confirmation which means that when the case appears before the judge the plan will be denied, BUT with leave to amend within 21 days thereafter. In other words, at the confirmation hearing the judge will give you up to 21 days to file an amended plan and to get the amended plan confirmed. If the amended plan is once again met by objection(s) by the trustee then you can file a second amended plan in order to get your plan confirmed. And if the second amended plan is met with objection and denied confirmation then….
The point is that an objection to confirmation is not fatal! You will get a second, third or even fourth bite at the apple in order to get your plan confirmed by the court. The cases will drag on for months and months during this process. However, keep in mind that all good things do come to an end. If the objections to confirmation simply cannot be cured –because you lack the income for example- then the case will eventually get dismissed or you will have to convert to a chapter 7 bankruptcy.