I’ve received an “Objection to Confirmation” of My Chapter 13 Bankruptcy Plan. What Do I Do Now?

Tens of thousands of people in California file Chapter 13 Bankruptcy every year. Filing a Chapter 13 case and getting that case confirmed by your bankruptcy judge, however, are two very different things. The process of getting a Chapter 13 Plan confirmed can be a bit daunting, but like everything else in filing a personal bankruptcy, having an experienced bankruptcy lawyer along with a bit of good humor will make the process smoother. There are many moving parts in getting a Chapter 13 bankruptcy case confirmed, from filing a proper Chapter 13 Plan, to disclosing all of your financial information, to making sure you make your plan payments on time, and all of this can make the confirmation process somewhat dizzying. Because knowledge is power, this post is aimed at arming you with some knowledge about overcoming a Chapter 13 trustee’s objections to confirmation of your Chapter 13 bankruptcy plan.
If you file a Chapter 13 bankruptcy case in the San Jose Division of the Northern District of California, where we primarily practice, then you should know that the trustee assigned to your case, along with her staff of case analysts and staff attorneys, are efficient, fair-minded professionals who work with us to help get your Chapter 13 Plan confirmed. Yes, you may very well receive something called a “Trustee’s Objection To Confirmation” in the early weeks after your Chapter 13 bankruptcy case is filed, and you might be tempted to think that the Chapter 13 Trustee has it out for you and does not want your case to be confirmed. But this is not the case. Yes, the Chapter 13 Trustee does represent the interests of your creditors. But it is also true, that the trustee and her staff generally want your plan to work, as long as it is filed in good faith.
It is helpful to bear in mind that proposing a Chapter 13 payment plan involves a bit more art than science. The debtor’s bankruptcy attorney is advocating for the debtor’s plan payments to be as manageable as possible while meeting various requirements. At the same time, the trustee is duty bound to make sure that the debtor’s creditors are receiving as much as the debtor can reasonably afford to pay. Hence, there is necessarily some back-and-forth between the debtor’s attorney and the Chapter 13 bankruptcy trustee. It is not at all uncommon for a debtor to receive an Objection to Confirmation from the trustee. This simply means that you and your bankruptcy attorney still have some work to do. But the reality is that Objections can often be remedied in fairly short order.
In the San Jose Division, every bankruptcy case is reviewed by the Chapter 13 Trustee’s office prior to the 341 Meeting of the Creditors. If the Trustee’s office needs more clarification on certain portions of your bankruptcy petition, or needs to review additional documents like paystubs, profit and loss statements for a small business, tax returns, or trust documents, they will file an Objection on your bankruptcy case so that they can review these documents prior to moving your case forward for confirmation. This doesn’t mean your case will not ultimately be confirmed. It simply means that the trustee’s office is doing their own due diligence.
How long do you have to take care of the points of the Objection? Do you need to get the Objection points taken care of by your Confirmation Hearing date? While it would be ideal to get the Objection taken of by your Confirmation Hearing date, it is not absolutely necessary. The Trustee’s office won’t dismiss your case just because you haven’t addressed all issues in the Objection by that time. What will happen if the Objection is not withdrawn by the time the Confirmation Hearing occurs? In the San Jose Division, all that happens is that your case gets taken off of the Confirmation Hearing calendar and is put on something known as the “Trustee’s Pending List,” where your case will stay until all objections have been taken care of. Once all Objections are resolved the Trustee will automatically take your case off of the Trustee’s Pending List and put it back onto the next Confirmation Hearing calendar date.
While it is true that if the objections aren’t resolved after some time has passed your case can be dismissed, this is not the primary aim of the Trustee’s office. The Trustee’s office wants to work with bankruptcy debtors to make sure that their cases and plans conform to the applicable bankruptcy laws in a timely manner, and are willing to work with debtors and their attorneys to make that happen. In fact, the staff of the San Jose Division Chapter 13 Trustee’s office are exemplary in their willingness to candidly discuss with bankruptcy attorneys how to resolve Objections.
If the Trustee’s office reviews your case further after the original Objection has been filed and has found certain objections to have been satisfied, but others have not, they can then file an “amended” Objection to address the issues that are still pending at that time.
Having an experienced bankruptcy attorney help you navigate through the complexities of getting a Chapter 13 case confirmed can mean the difference between a successful Chapter 13 Bankruptcy and a dismissed one. Call us to schedule a free consultation today.