THE CHAPTER 12
PLAN AND CONFIRMATION HEARING (Page
Within 45 days after filing the plan, the
presiding bankruptcy judge decides at a “confirmation hearing”
whether the plan is feasible and meets the standards for
confirmation under the Bankruptcy Code. 11 U.S.C. §§ 1224, 1225.
Creditors, who receive 20 days’ notice, may appear at the
hearing and object to confirmation. Fed. R. Bankr. P. 2002(a)(8).
While a variety of objections may be made, the typical arguments
are that payments offered under the plan are less than creditors
would receive if the debtor’s assets were liquidated, or that
the plan does not commit all of the debtor’s disposable income
for the three-to-five-year period of the plan.
If the court confirms the plan, the chapter
12 trustee will distribute funds received in accordance with the
terms of the plan.11 U.S.C. § 1226(a). If the court does not
confirm the plan, the debtor may file a modified plan. 11 U.S.C.
§ 1223. The debtor may also convert the case to a liquidation
under chapter 7.3 11 U.S.C. § 1208(a). If the debtor fails to
confirm a plan and the case is dismissed, the court may authorize
the trustee to keep some of the funds for costs, but the trustee
must return all remaining funds to the debtor (other than funds
already disbursed to creditors). 11 U.S.C. § 1226(a).