Chicago Bankruptcy Lawyers & Attorneys
Bankruptcy Advice From Attorney David Siegel
When does the debtor have to appear in court under Chapter 13?
Once a bankruptcy case is filed under Chapter 13, the clerk of the United States Bankruptcy Court is going to issue a notice of the 341 Meeting of Creditors. The notice is pursuant to Section 341. The actual notice goes out under Section 342 and the debtor is required to be examined under oath under Section 343 of the Bankruptcy Code.
The reason for the timeframe between the filing and the date that the debtor must appear which is approximately 4 weeks is to give creditors an opportunity to appear at that Meeting of Creditors. Typically in a normal Chapter 13 bankruptcy case, the only people present would be the debtor, the debtor's attorney and the trustee. The trustee will then ask a series of yes/no questions under oath to the debtor which requires the debtor simple answers. If the trustee is satisfied with the answers and satisfied with the documents that are filed in the case, then there won't be a further hearing. If, on the other hand, the trustee is requiring amendments or additional documentation, that it is possible that the trustee could require the debtor's appearance at a second meeting but it is not likely.
Also, when it comes time for confirmation, the debtor does not have to appear in court provided that the case is going to be recommended. In the event that the case is not going to be recommended for confirmation, then the debtor's attorney will appear and ask for additional time to provide the documentation or make the proper amendments so that the case can be confirmed. In the rare case where the trustee and the debtor's attorney cannot reach an agreement on whether a case can be confirmed or not, the Court might set the matter for a hearing. At that hearing, a debtor may be required to appear to testify based upon certain budgetary items. For example, if the debtor has an extreme medical expense per month, the court might want to hear from the debtor as to what that expense is, how long that expense is going to exist, and how the debtor can make the plan payment based on their budget expenses.
Thus, the debtor typically only appears at the 341 meeting of creditors under Chapter 13 and will not be required to appear at a confirmation hearing. In rare circumstances, the debtor will be required to appear and testify at the confirmation hearing if the debtor and the trustee cannot come to an agreement on whether the case is confirmable under the United States Bankruptcy Code.
What if the court does not approve the debtor's Chapter 13 plan?
In order to have a successful Chapter 13 bankruptcy case, you have to get off to a great start. You have to make your monthly payment within 30 days of the case being filed or the plan being filed and you must make proper amendments or provide proper documentation to your Chapter 13 trustee so that trustee can be in a position to recommend your case for confirmation before the court at the confirmation hearing.
In the event that the case is not confirmable, there are several things that you can do. First, you can try to make proper amendments so that the trustee is satisfied to the point where the trustee can recommend confirmation. Two, you can modify the plan to make changes to either the monthly amount, the amount the creditors get in particular or to the unsecured creditors such as a higher percentage. Three, if you can't get a confirmable plan, you might want to consider converting to Chapter 7 which is straightforward bankruptcy liquidation. You also can do nothing and allow the case to dismiss under Chapter 13 with the option of possibly refiling it in the future.
So you as the debtor Andrew debtor's counsel have many options when it comes to getting a case confirmed. If you can't get that case confirmed, you can make the proper changes, you can think about converting to Chapter 7 or you can simply let the case dismiss if you feel that the amount required to pay each month is more than you can handle under your budget.
