Chapter 13 is a court-approved restructuring of debt that requires you to commit to a repayment plan that will last for three to five years. However, the plan you propose is not effective until the bankruptcy judge approves it after a confirmation hearing, at which creditors and/or the appointed bankruptcy trustee can raise objections.
The trustee might object to your plan based on one or more of these assertions:
- You might not be distributing all of your disposable income to the creditors.
- You don’t have enough income to carry out the plan.
- The plan doesn’t pay the unsecured creditors at least what they would have received in a Chapter 7 bankruptcy.
- The length of the plan is either too short or too long.
- You didn’t provide the trustee with the appropriate supporting documents.
- The plan was not proposed in good faith.
These objections are raised by the trustee in advance of the confirmation hearing, which allows you the opportunity to resolve the issues ahead of time. With the aid of your attorney, you can negotiate changes to the plan and supply information that may overcome objections. If you cannot resolve the dispute with the trustee, you will have to demonstrate to the bankruptcy judge at the confirmation why the Chapter 13 is reasonable and should be approved.
Creditors may also object to your repayment plan. They may argue that:
- You are an unqualified debtor, in that you have insufficient disposable income or your debts exceed the limits placed by Chapter 13.
- The plan includes debts that are not dischargeable or omits debts that should be subject to repayment.
- The plan payments are insufficient and/or you are withholding disposable income which should be paid to creditors.
Again, you will either have to amend your plan, negotiate with the creditors or respond to the creditors’ objections prior to or at the confirmation hearing.
An experienced Georgia Chapter 13 attorney can help you properly prepare your repayment plan so as to minimize or avoid objections by the trustee or by creditors. In general, bankruptcy courts favor approval of plans that are proposed in good faith and that are capable of being carried out. Even if your debt levels exceed the maximum limits for Chapter 13, there are debt reduction strategies that may prove effective.
From offices conveniently located in Athens, Douglasville, Gainesville, Lawrenceville, Marietta and Scottdale, Jeff Field & Associates represents debtors in Chapter 13 bankruptcies throughout the Atlanta metropolitan area and beyond. To schedule an appointment call 404-381-1278 or contact us online.