NJ Attorney Helps Debtors Resolve Objections to Chapter 13 Plan Confirmation

Providing skilled case management focused on smooth plan confirmation

In a Chapter 13 bankruptcy, you are required to submit a proposed plan for making partial debt repayment to your creditors over a three- to five-year period. Unlike in a Chapter 11 bankruptcy, the repayment plan does not require the creditors’ approval. However, the creditors have the right to raise objections to the plan on limited grounds. When creditors object, you have to be able to defend your plan or you could be saddled with more onerous requirements for repayment. When you retain the Law Offices of James C. Zimmermann in Northern New Jersey, you get knowledgeable counsel to create your Chapter 13 plan and to represent you in any disputes that might arise. For more than 30 years, debtors have trusted us to resolve their bankruptcies efficiently and cost-effectively. You can be confident in our ability to respond to objections capably and keep your bankruptcy on track.

Possible objections to Chapter 13 bankruptcy plans

Any objections to a Chapter 13 bankruptcy plan must be filed in bankruptcy court and served on the debtor at least seven days before the scheduled plan confirmation hearing. Objections that may be raised include the following:

• Lack of good faith — Creditors are entitled to receive at least as much in a Chapter 13 as they would if the debtor had filed a Chapter 7 liquidation. If this does not appear to be true, a creditor can allege the plan was submitted in bad faith.
• Inaccurate listing of debt — The plan must list the debtor’s full amount of unsecured debt. Creditors can raise objections about errors and omissions in this listing.
• Misclassification of debt — A Chapter 13 bankruptcy treats secured debt differently from unsecured debt. It is a critical distinction, since the plan requires only a partial repayment of unsecured debt. Secured creditors will object to a debtor misclassifying their debt as unsecured.
• Unlawful cramdown — A cramdown is the process of reducing the amount owed on a secured debt, such as an auto loan, to the value of the collateral. However, federal law limits which property qualifies. For example, a car must have been purchased 910 days prior to filing for bankruptcy. Personal items such as furniture must have been held for at least one year. Attempting to cram down amounts owed on recently purchased items will draw objections.
• Plan not feasible — Having examined the plan, a creditor might believe that you will be unable to comply with the requirements you’ve placed on yourself. They might give as reasons that you are not making enough money or that you have been overly optimistic about business income.
• Improper priority — Creditors get paid back in an order of priority based on numerous factors. Creditors can object if they believe that they have been unfairly moved to the end of the line.

Creditors’ objections can turn plan confirmation into an adversarial proceeding. The court might require discovery on certain issues and the process can become protracted. Working with the bankruptcy trustee may allow for objections to be resolved so the plan can be confirmed. This may require modification of salient points of your plan. To ensure your interests are protected, you should hire an experienced bankruptcy attorney rather than attempting to manage objections by yourself.

Ask an experienced bankruptcy lawyer about objections to Chapter 13 plans in New Jersey

The Law Offices of James C. Zimmermann is a debt relief agency, helping clients throughout Northern New Jersey discharge eligible debt under Chapter 13. We have offices in Vernon, Wayne, Pompton Lakes, Hackensack and Nutley. To schedule a free initial consultation, call 973-764-1633 or contact us online.