Chapter 13 Bankruptcy & The Confirmation Hearing

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Filing for chapter 13 bankruptcy in New Jersey is a good idea if you accumulated a lot of debt because of temporary circumstances that no longer apply. For example: divorce, job loss or lay off, death of a wage-earning spouse, temporary disability/disease, or a serious injury that prevented you from working for a substantial amount of time.

As long as your circumstances have now righted themselves, you shouldn’t have a problem with a chapter 13 bankruptcy. You should hold a job that provides you with a steady and reliable source of decent income and have your life in order physically, mentally and emotionally (for the most part – none of us is perfect!).

Even with all of these factors in place, you may still be facing a wall of debt that you accrued while your life was upside-down. Rather than filing for a chapter 7 liquidation bankruptcy, in which you’d put your assets at risk, a better option under these circumstances is a chapter 13 bankruptcy.

A chapter 13 will help you to reorganize your monthly payments so that they are more manageable. This will be accomplished by lowering some of your debt totals, reducing interest rates, eliminating past due amounts and other compromises that your bankruptcy attorney will be able to negotiate for you. The end goal of a chapter 13 bankruptcy in New Jersey is to prevent you from losing any of your assets while satisfying your creditors, too.

What is a Chapter 13 Confirmation Hearing?

In order for your chapter 13 bankruptcy to be considered approved and finalized, it must go through a process called ‘confirmation.’ The New Jersey bankruptcy court will hold a Confirmation Hearing in order to determine whether or not your plan will be confirmed.

Who Attends the Confirmation Hearing?

  • NJ bankruptcy judge
  • Any of your creditors who wish to attend
  • Your bankruptcy trustee
  • Your New Jersey bankruptcy lawyer
  • You (depending on the requirements of your local NJ district court rules)

Who Can Object to the Confirmation?

Any of your creditors (people/companies to whom you owe money) and your bankruptcy trustee may object during the confirmation hearing. If there is an objection to your chapter 13 plan, the objecting party will explain to the presiding judge why they object and how they feel your plan should be changed.

If there is an objection, it will typically come from your mortgage or auto lender. These are almost always the largest loans owed by debtors. Objections from these two parties usually occur when your proposed chapter 13 plan doesn’t allot enough money to be paid to your mortgage or car loan.

What Happens if an Objection is Made?

Each party attending the Confirmation Hearing will have a chance to share their proposed plan for your chapter 13 bankruptcy. The judge will hear all arguments before making any decisions. Additionally, some NJ bankruptcy judges have concerns of their own during Confirmation Hearings.

If you and your creditors cannot agree on the terms of your chapter 13 bankruptcy plan, your NJ judge will almost always set a second Confirmation Hearing, giving ample time for everyone involved to come to an agreement. If there appears to be no possible reconciliation between you and your creditor(s) even at a second Confirmation Hearing, the judge will most likely make the decision for you.

You should never attend a Confirmation Hearing alone. While objections are often related to repayment amounts, complicated and confusing legal issues may also be raised that you may not understand. Be sure to retain a respected, experienced and reliable New Jersey bankruptcy attorney to ensure that the outcome of your hearing is beneficial to you.

Image credit: Nguyen Hung Vu

 

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