Chapter 13 Bankruptcy – What is an objection to confirmation?

Kelly Bankruptcy Podcast
Kelly Bankruptcy Podcast
Chapter 13 Bankruptcy – What is an objection to confirmation?


Jeff Kelly: Hello, this is Jeff Kelly. I’m a Georgia bankruptcy attorney. And today I would like to talk to you about objection to confirmation. Okay? In every chapter 13 case that I file, I always warn my clients after your 341 meeting of creditors, you are going to get an objection to confirmation, don’t panic, exclamation point. I give everybody this packet. And I try to circle that paragraph. And I’ve got an all cat letters Don’t panic. Now. So your 341 meeting of creditors, that’s your first court hearing. And that’s where you go and the trustee is going to ask you questions about your case. Basically, we’re going to try to pick it apart and find stuff that’s wrong and needs to be fixed. And at the end of the hearing, they will usually announce what most of their objections are, however, you will hear them say, we reserve the right to file further objections. And most of the time, they will take the file back to the office and they’ll they’ll find other things. It never fails, no matter how many times I tell my client, don’t panic, people panic anyway.

Jeff Kelly: The actual letter will say something like, you know, comes now the United States, the chapter 13 trustee and follows the following objections. And then it will end it with moves for dismissal or conversion to chapter 7. And clients will see this language and this is the way most clients will interpret that language though in their brain, they will say my case has been thrown out. All is lost. My case is over. And none of that is true. What it means is there is something about your case, the trustee wants changed. And as long as you communicate with your attorney. Usually most objections are pretty easy fixes.

Jeff Kelly: Okay, so what are some examples are the most common objections? I think one of the most common objections is failure to list all of your creditors that the trustee will ask debtors Have you listed all your creditors? Well, yes, I did. But I think I forgot this one. Well, if you forget list, a creditor trustee is going to object and they’re going to have you listed. Another really common one is people have a house and they owe homeowners association dues. And if you owe homeowners association dues, you have to list that in the bankruptcy because that is a debt that is owed. And it also has to be listed in the chapter 13 plan itself. Another common objection is term problem. What is term problem? The longest that a chapter 13 can go for is five years 60 months max. So let’s say you’ve got to set payment in your chapter 13 payment and your debt is so high, There’s no way it’s going to get paid out within five years. The trustee is gonna fall this term objection.

Jeff Kelly: Does that always mean that your chapter 13 payment is going to have to go up to fix that term problem? Well, no, not necessarily. Maybe there’s a claim in there that that shouldn’t be so that the first question to ask is why what is causing this term problem? You know, sometimes we’ll have cases where a client has gotten divorced, and they signed house over to their ex spouse, and they had no idea that their ex spouse was, you know, a full year behind on payments on that house. Well, then, the house creditor plops down in this case and and files a claim for the rear edge on the house that the client thought the ex spouse was taking care of him was current on and finds out they’re not. Well, the easy way to solve that is to follow surrender provision in the chapter 13 plan to get rid of the the interest in the house. You know, oftentimes we can fix it that way. Bottom line is, you got to communicate with your attorney in not panic. Of course, it never fails that most clients will be opening their objection to confirmation.

Jeff Kelly: On Friday, five o’clock, after the trustees office is closed after our office is closed and then go into a panic all weekend. No need to panic. There definitely is a need to communicate with your attorney. And you set up a time to walk through the objections. They can almost always be fixed.

Jeff Kelly: Funding is another common objection. Even in cases where you know a lot of times we’ll file a Chapter 13 and we’ll intend to file what’s called an employment deduction order and tell the client Hey, the your employer will take this out of your check but you are going to have to mail your payments And yourself until the employer starts. And people forget. And we have people sign notices saying they understand they’re supposed to do that, and people still forget. And if you forget to make the payment yourself until it starts coming out of your paycheck, then you will get this funding objection, and that funding will have to be cured in order for your case to be confirmed. Let me think of some other examples. 401k loans not being listed on the income list showing that, you know, the paycheck shows you got a 401k loan coming out. But nowhere is this listed or referred to in your petition, the trustee is going to object. And in addition to listing that 401k loan on the income statement, we also have to add a plan provision in your chapter 13 plan that says when the 401k loan gets paid off, all that extra money will go into the chapter 13 plan.

Jeff Kelly: The Another common objection is maybe there’s an asset out there that’s not properly listed on Schedule B. Usually the way this will come up is client just forgets to list it. And then the creditor files a claim. Maybe for some old Junker car that nobody thought about, well, that’s an asset, it has to be listed on the schedule, as well. Again, I want to emphasize, there’s no need to be scared to death, even though the objection to confirmation does look very intimidating. You just got to read, read through it, relax, take a deep breath. Get on the phone with your bankruptcy attorney. And one by one. knock those objections out.

Jeff Kelly: Let’s see, what else do we need to look through here. A lot of times you’ll get creditor objections as well in addition to trustee objections, you’ll get a creditor objection to confirmation. The most common one is you’ll have a car company that let’s say you’ve got a chapter 13 plan, you’ve got a car that’s valued at $10,000. And that’s how much you’re going to pay in the plan based on that value. Car Company may object and say, hey, we’ve looked at the N.A.D.A, and the N.A.D.A says that car’s worth 15,000 you got to bump that car value up or else. So if you want to check your car value, you can go to and and see how it it pairs up with what a creditor may allege that you might owe on your car.

Jeff Kelly: What happens if you just have a flat out disagreement with a creditor? And the creditor says one thing and you say another and there’s a pending objection to confirmation? Well, then you’ve got to go to that confirmation hearing. And your case has to be argued. And once you finish making your argument and the creditor finishes making their argument, then the judge has to make a ruling. And that’s pretty much it about objections to confirmation. If you’ve got any questions, please don’t hesitate to call my office at 706-295-0030 Thank you

Jeff Kelly

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