What are some common objections to a Chapter 13 plan?

In a chapter 13 bankruptcy proceeding, the debtor is expected to create a plan that outlines how he or she is going to pay creditors. Although the plan is for repayment of debts, there is no guarantee that creditors are going to get paid for every penny owed to them. This will naturally give rise to objections. Before the court will confirm the plan of repayment, it will allow creditors to file chapter 13 objections to the terms of the plan. Most of these objections will come from unsecured creditors who will have to be paid after the secured and priority creditors are paid.

One objection to the plan is that it does not going to pay the full amount of the claim filed in the court. The claim will include interest rates and other late fees. It is seldom, if ever, will creditors get their full claims. Another objection to the plan is that it was not filed in good faith. The creditors may know something that the debtor is hiding from the court, like hiding some assets. This should be disclosed in the objection filed. Unsecured creditors may also object to the collateral securing debts on some creditors. If the collateral is not valued properly, there could be less to share among creditors.

All of these objections should be settled first before the confirmation of the plan can proceed. Once the plan has been confirmed the debtor and creditors are bound by its terms. So, if you are a creditor in a bankruptcy proceeding you should file your objections before the plan confirmation.