The trustee might object to your Chapter 13 plan. If there is time before the confirmation hearing you can negotiate with the trustee and amend your plan to fix whatever problems the trustee may have. Usually the trustee’s objection falls into one of two categories. Either the trustee doesn’t believe that you are paying all of your disposable income into the plan or the plan does not include debts that must be paid off in full through the plan.
The trustee in your case will review your income and expenses information as listed in your bankruptcy filing and determine if you are paying enough into the plan. They may object to the plan and ask you to amend the plan if they question the validity of some of your expenses or determine you underestimated your income. The trustee may also object to the plan if they believe that the plan is not feasible because you do not have enough income to make the monthly plan payments.
Another potential issue with your Chapter 13 plan is that you must pay off all of your priority obligations in full. Priority obligations include domestic support obligation such as alimony and child support, most tax debt, obligation to employees like wages and unpaid contributions to employee benefit plans, the trustee’s administrative expenses, and all the outstanding back payments you owe on any secured property you want to keep.
Your Chapter 13 also needs to pay your unsecured creditors at least as much as the value of your unsecured non-exempt.
The trustee or any of your creditors my also object to the discharge of your entire case if you do not provide all the information the trustee needs to handle your case or if you commit fraud. When you file a Chapter 13 bankruptcy you are under an obligation to maintain and provide adequate financial records. You must disclose all of your assets and maintain and provide them to the trustee if required. In addition, you an obligation to comply with all legal orders that arise out of your case. If there is an objection to your discharge on these ground and you lose, none of your debts will be discharged and you will not be able to include these debts in a future bankruptcy case.
If you commit fraud the penalties are even more severe and you may face prison time and heavy fines. Fraud is defined as knowingly and fraudulently concealing assets or making a false statement, in writing or orally, in connection with your bankruptcy case. It may include any of the following:
- Intentionally including or omitting false information in your bankruptcy filing
- Avoiding including assets in your bankruptcy by hiding the assets, lying about the assets, or transferring them to another person
- Perjuring yourself to the bankruptcy trustee or judge
Once you decide to file bankruptcy you should keep in mind that the penalty for not adhering to all of your obligations under the law is severe, ranging from your debts not being discharged to criminal penalties if you intentionally try to deceive the court.
Bankruptcy is complex and many answers depend upon your specific situation. If you still have questions you can schedule a free consultation with a bankruptcy attorney.