Your Chapter 13 confirmation hearing (341 meeting) is a simple hearing where the trustee reviews your income and budget to make sure that the plan is feasible. Do you make enough income to afford the payments? Have you started making payments on the mortgage and the plan the month you filed. Did you include paying necessary taxes in your budget? The 341 hearing and the confirmation hearing are held at the same time in Louisville, Kentucky but on different days in Indiana and the Lexington district.
The Chapter 13 Trustee administers an oath and you identify yourself by producing a government photo id such as a drivers license and your social security card. The Chapter 13 trustee is not the judge, but your answers are under oath.
What is different between a 341 and a Confirmation Hearing.
The 341 hearing and an accurate petition.
The 341 hearing in a Chapter 7 or 13 is concerned with the accuracy of the petition. The Confirmation hearing is concerned with the plan and whether it is feasible and complies with the court requirements. In Louisville these hearings are combined into just one hearing where everything is reviewed at one time. Lexington and Indiana have the 341 and confirmation hearings are on different days
The Confirmation hearing and a workable plan.
In a Chapter 7 case the 341 will be also be concerned whether assets should be sold to repay creditors. But it is very rare that a Debtor has more assets than he is allowed. In a Chapter 13 assets are retained unless the debtor wants to surrender or sell them. Still the issue of liquidation may come up. A Chapter 13 must repay as much as a Chapter 7 would. If it does not then plan payments may have to be increased. Yes you can keep your jet plane. But the plan may have to repay as much as the jet plane would have repaid creditors.
What is necessary in the plan
The Chapter 13 trustee will ask primarily questions about your income, expenses, and any transfers of property prior to filing. Your plan must pay priority debts such as income tax claims and secured debts in full or up to the value of the security. You Chapter 13 plan may lower the interest rates on some secured debts such as a car loan and lower or eliminate penalties and interest on income taxes. Interest during the bankruptcy is normally never paid on unsecured debts. How you plan to repay certain secured and priority creditors will be reviewed.
Conduit states and the need to pay the month the case is filed.
The more that is paid through the plan the more the Trustee makes in fees. States like Indiana require mortgage payments are paid through the plan. These states are conduit states where the Trustee takes the primary responsibility for insuring the mortgage is paid Kentucky requires you pay the mortgage directly and Kentucky is not a conduit state. It is often best to pay the auto payments through the plan. Paying car payments through the plan allows you to lower the interest rate or cram down the auto. Some people will qualify for stripping the car and just paying the secured part in full. However you may be in default and behind If you pay the car through the plan and then dismiss a case.
At the 341 Meeting
Long before the hearing your attorney will send documentation to the Trustee to prove the facts in your petition. There is a video in our video section that shows what a 341 meeting is like. You will notice that the hearing is very informal but you should still be properly dressed, respectful and ready to answer any questions.
How the Chapter 13 Trustee is paid.
The Chapter 13 trustee earns a very small fee to verify the facts in your petition and earns a percentage from the payments you make to him for your creditors. He will often insist your car payments be paid through him and that the payments be payroll deducted to ensure payments are paid on time.
Motions to dismiss and terminate the stay.
If the Chapter 13 payments are not paid on time the case is dismissed. Mortgage payments are paid directly by you to the mortgage company starting the month you file. If the mortgage payments are not made on time, the lender will file a motion to the stay and the house will go back into foreclosure. Your Chapter 13 payments to the trustee start the month you file. Creditors can file an objection to your plan but most creditors will work out any objections with the attorney or trustee prior to the Chapter 13 and 341 Confirmation Hearings. Here is an exhaustive checklist of what you need to know if you are filing a Chapter 13 in Western Kentucky.