Key Takeaways / Summary:
- A Chapter 13 repayment plan requires listing all debts and assets without exception.
- Unfiled tax returns or missed plan payments prior to confirmation frequently prompt the trustee to object.
- Failing the Chapter 7 best-interest test can draw an objection to confirmation.
- Failing to devote disposable income to a plan can draw an objection to confirmation.
Navigating the financial restructuring process requires patience, clarity, and attention to detail. When you work with Sasser Law Firm, you gain a dedicated team that takes a calm, thorough approach to your case.
Under federal law, individuals must disclose every single debt and asset when filing, meaning you do not get to pick and choose which liabilities to include in your initial paperwork. Failing to list everything accurately can cause more problems.
Understanding why a plan might face pushback helps ensure your case proceeds smoothly toward confirmation.
Failing to File Required Tax Returns or Keep Up With Trustee Payments
One of the most frequent administrative hurdles involves missing tax filings. The bankruptcy case requires that you remain current on your annual tax returns, requiring tax filings for the four years preceding your petition date.
If you have unfiled tax returns, the trustee cannot properly evaluate your overall financial picture or confirm your priority debt balances.
Additionally, you are required to start making your proposed monthly payments to the Chapter 13 trustee within thirty days of filing your case, long before the court officially confirms your plan. Missing these initial payments before confirmation signals to the court that the proposed budget may not be feasible, prompting objections from the trustee.
Inaccurate Financial Disclosures and the Chapter 7 Best Interest Test
Full disclosure of all assets and liabilities is mandatory in every bankruptcy filing. Omitting a bank account, an item of property, or a secondary creditor can result in an objection to confirmation or a motion to dismiss.
Accuracy is especially critical when applying the Chapter 7 best interest of creditors test. Under this rule, your Chapter 13 repayment plan must provide unsecured creditors with at least as much money as they would receive if your non-exempt assets were liquidated in a Chapter 7 proceeding.
If your disclosures are incomplete or your asset valuations are off, the court cannot verify if this standard is met, leading to formal objections from creditors or the trustee.
How Plan Amendments Can Resolve Objections and Keep Your Case Moving
Receiving an objection to your proposed reorganization plan is a common part of the process, not an automatic denial of relief. Many objections stem from easily correctable issues, such as clarifying income figures, updating expense reports, or adjusting payment amounts to meet the best interest test.
In most instances, these disputes can be resolved by drafting and filing timely plan amendments. By submitting updated schedules or adjusting payment terms, you can keep your reorganization moving forward.
Work With Experienced Chapter 13 Bankruptcy Attorneys in the Triangle Area
We understand the intense pressures of potentially losing your home, your vehicle, or your business. We work with you to identify and evaluate your options, taking the time necessary to protect your interests.
If you are facing financial challenges in Wake County or across The Triangle, contact Sasser Law Firm or give us a call at (919) 319-7400 to discuss how we can assist you with your Chapter 13 plan.
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