What is confirmation or a confirmed plan in Chapter 13?
In Chapter 13, you put forth a reorganization plan, notifying your creditors of what they can expect during the life of the case. Once the judge approves this reorganization plan, the plan is known as a ‘confirmed plan’. A confirmed Chapter 13 plan is the instruction manual for the case. It tells everyone – you, the court, your creditors, and in fact, the world – what you are doing in the case. If you comply with the terms of the plan, you will receive a discharge at the end of your case, and the debts that can be resolve or eliminated in Chapter will be resolved or eliminated permanently.
Prior to the confirmation hearing, which is generally 2-3 months after the filing of your case, your attorney will negotiate with your creditors to resolve all the objections.
Objections in a Chapter 13 case encompass a lot of rights and changes, so it is not uncommon for creditors, and even the trustee in your matter, to object to your initial Chapter 13 plan. So over the first few months of your Chapter 13 case, your attorney may negotiate with your creditors until everyone agrees what works in your case and under the bankruptcy code.
Once the agreements are all resolved, the judge in your case will give his or her final approval, and your case will be ‘confirmed’ or approved by the judge.
If you comply with all the terms of a confirmed plan, your Chapter 13 case will resolve nicely for you, resulting in a discharge, perhaps your car paid, your mortgage reinstated, and your driver’s license permanently returned, all while paying what is typically pennies on the dollar to eliminate your remaining debt. This is a great result that can happen in Chapter 13.
But what happen when life catches up to you in the middle of a Chapter 13 plan?