Bankruptcy

What Does this Chapter 13 Notice Mean?

By Jonathan Ginsberg, Atlanta Bankruptcy Attorney

A lot has changed in the consumer bankruptcy world during the last 20 years, but one thing is constant – the written notices issued by the clerk of court and by the Chapter 13 trustee’s office will cause panic and confusion in the minds of bankruptcy filers.

Perhaps the most common confusion notice – at least in the Northern District of Georgia where I practice – is the standard objection to confirmation notice issued by the Chapter 13 trustees, which is titled (in large bold print) “Chapter 13 Trustee’s Objection to Confirmation and Request for Dismissal of Case.”   After listing item after item, the pleading concludes with an ominous assertion – “Wherefore the trustee moves the Court to inquire into the above objections, deny Confirmation of the Debtor’s plan, and to dismiss the case.”

I know that the goal of this pleading is to provide notice to the debtor and the debtor’s attorney, and to cause the debtor to contact his lawyer immediately.  However, in reality, many times the debtor will read this notice to mean that his case has been dismissed.  And given the problem that scam artists are ready to mislead Chapter 13 debtors anyway, I have long felt that this objection to confirmation ought to come with a notice to the debtor that the objection does not mean that his case has been dismissed but that he needs to call his lawyer.

Another example – I recently received this email from a reader of my Atlanta bankruptcy law blog:

please explain, I received a letter from the trustee office stating the judge was in support of the order to  dismiss my chapter 13. The letter had a listing of all my payments and they were at 25%. The letter also stated that the case was feasible. Please tell me if that means that my case has or has not been dismissed. The term  ” case is feasible” is confusing to me.

Now I have no idea what document this person received because this question makes no sense to me.  It does appear to me that the “legalese” contained in the notice this person received completely confused her.  It seems to me that the Courts could do a better job explaining what some of these notices mean (perhaps a section on the Clerk’s web site showing sample notices with explanations) and debtor’s attorneys could include areas on their web sites offering similar explanations.

Full post as published by Bankruptcy Law Network on January 30, 2010 (boomark / email).