Chapter 13 confirmation hearing and 341 meeting is a simple hearing where the trustee reviews your income and budget to make sure that the plan is feasible. 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. Some of the questions they ask are as follows:
- Do you make enough income to afford the payments?
- Did you start making payments on the mortgage and the plan the month you filed?
- Did you include paying the necessary taxes in your budget?
The Chapter 13 Trustee administers an oath and you identify yourself by producing a government photo ID such as a driver’s license or your social security card. The Chapter 13 trustee is not the judge, but your answers are still under oath.
What is the difference between a 341 meeting and a confirmation hearing?
1. The 341 meeting is for an accurate petition.
The 341 meeting in Chapter 7 or 13 considers the accuracy of the petition. Then, the confirmation hearing considers the plan and whether it’s feasible and complies with the court requirements. In Louisville, these hearings combine into one hearing where the review takes place for everything at one time. Lexington and Indiana have the 341 meeting and confirmation hearings on different days.
2. The Confirmation hearing and a workable plan.
In a Chapter 7 case, the 341 also considers if assets must be sold to repay creditors. But it is very rare that a debtor has more assets than is allowable. Chapter 13 retains assets unless the debtor wants to surrender or sell them. Still, the issue of liquidation might come up. Also, Chapter 13 must repay as much as Chapter 7. If it does not then, plan payments may have to increase. Yes, you can keep your jet plane. But, the plan might have to repay as much as the jet plane would have repaid creditors.
3. What is necessary for the plan?
The Chapter 13 trustee asks primary questions about your income, expenses, and any transfers of a 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. It may also 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 is also reviewed.
4. Conduit states and the need to pay the month the case is filed.
The more money that pays through the plan, the more the Trustee makes in fees. States like Indiana requires mortgage payments paid through the plan. These states are conduit states where the Trustee takes the primary responsibility for ensuring the mortgage is paid. However, Kentucky is not a conduit state and requires you to pay the mortgage directly.
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 qualify for stripping the car and only paying the secured part in full. However, you might be in default and behind if you pay the car through the plan and then dismiss a case.
5. 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 must dress properly, be respectful, and be ready to answer questions.
6. 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.
7. Motions to dismiss and terminate the stay.
If the Chapter 13 payments are not paid on time, the case dismisses. 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 files a motion to the stay, and the house goes 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 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.
I hope this helps you better understand the difference between a 341 meeting and a confirmation hearing. Please call our office if you have any questions at 502-625-0905 today.