Bankruptcy confirmation is part of Chapter 13 bankruptcy. Debtors must submit a repayment plan within 15 days of petitioning the bankruptcy court. The confirmation hearing takes place in front of a bankruptcy judge who determines if the repayment plan is practical and meets the standards set forth in the U.S. Bankruptcy Code.
The bankruptcy confirmation hearing generally takes place no later than 45 days after the 341 Creditors Meeting. During the meeting of creditors, debtors are questioned about their bankruptcy petition and repayment plan. This information must be provided under oath although the meeting does not take place in bankruptcy court.
Debtors filing for bankruptcy protection must undergo the 'means test'; also referred to as the 'Best Efforts Test'. The 'means test' is used to determine if debtors qualify for debt relief under Chapter 7 – liquidation of assets.
The new bankruptcy laws enacted in 2005 have made filing for Chapter 7 bankruptcy considerably more difficult. The vast majority of individuals filing for personal bankruptcy are now forced to seek debt help through Chapter 13.
Once bankruptcy confirmation occurs, the debtor must make payments to the bankruptcy Trustee, who in turn distributes payments to creditors. If the repayment plan does not meet the guidelines of the bankruptcy court, the debtor will be required to submit a modified plan.
Bankrupcy repayment plans can be modified in the event the debtor experiences income-changing events such as the loss of their job or disabilities which prevent them from working. In instances where debtors encounter long-term financial setbacks which prevent them from adhering to their repayment plan, debtors are provided the opportunity to file for Chapter 7 bankruptcy.
Once the debtor completes their repayment plan in full, all debts are discharged. The debtor should obtain a current copy of their credit report. Debts which remain on the credit report can be disputed through the three major credit reporting agencies; Equifax, TransUnion and Experian.
Bankruptcy causes detrimental effects to your credit and can remain on credit reports up to ten years. If you are facing personal bankruptcy, consider looking into bankruptcy alternatives such as debt consolidation, debt settlement, credit counseling and budgeting.
Learn more about bankruptcy chapters, how to file bankruptcy and bankruptcy alternatives in our all-inclusive bankruptcy article library. If you are facing bankruptcy or foreclosure, contact Simon Volkov to discover the various options available.