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Options when a repayment plan is not confirmed by the court

On Behalf of | Dec 14, 2018 | Chapter 13

There are many procedural steps that must be met in order for a Tennessee resident to successfully implement the repayment plan that they create through their Chapter 13 bankruptcy filing. Their plan must be feasible for them to follow and it must properly prioritize the debts that they are bound to repay. The debtor’s creditors must agree to the terms of the repayment plan, and finally the bankruptcy court in charge of the debtor’s case must confirm it to allow repayment to begin.

While many individuals are able to execute their original repayment plans, others discover at their court confirmation hearings that their plans will not be approved. When a repayment plan is rejected by a court a debtor has several options for moving their case forward.

First, debtors whose plans are not confirmed may seek to modify their plans. A modified repayment plan may remedy the problems that existed in the debtor’s original plan and may satisfy any issues that the bankruptcy court had with the original filing. Debtors who face this process may wish to get legal help with the redrafting of their repayment plans from debt relief and bankruptcy attorneys.

Second, a debtor whose repayment plan is rejected may wish to convert their Chapter 13 case into a Chapter 7 case. Chapter 7 bankruptcy does not require repayment and instead focuses on the liquidation of a debtor’s assets; there is a nominal fee for converting a case from Chapter 13 to Chapter 7. Knowing what to do when a repayment plan has been rejected can be tough for a person who wants to become debt free, and therefore it is beneficial to many to work with bankruptcy attorneys that they know and trust for sound guidance.