A confirmation hearing is a court hearing required by the Bankruptcy Code and applies to Chapter 13 cases. A confirmation hearing does not occur in a Chapter 7 case. The purpose of the confirmation hearing is to ensure all parties in interest (creditors, the trustee(s), the debtor) agree with the debtor’s proposed Chapter 13 plan. If everyone is in agreement, the case is confirmed. If there is a challenge to the plan by any party, a confirmation hearing will be held in order for the judge to address and rule on the party’s concerns.
In reality, the confirmation hearing in many Chapter 13 cases will not actually occur. This is because the confirmation hearing is usually set far enough in advance (a month or so after the 341 meeting of creditors) that most, if not all case issues can be addressed and resolved well in advance of the scheduled confirmation hearing. If there are no pending objection to the confirmation of the Chapter 13 plan, the plan will be confirmed before the hearing date and thus the hearing will not be held since it would be unnecessary at that time. For this reason, debtors are often advised by their attorney that there is no need to attend the confirmation hearing, since the attorney anticipates resolving all issues prior to any hearing. In other cases, there may be many issues to work out prior to the confirmation hearing, and additional time may be requested to resolve the issues. Most of the time, the parties and the court will allow the confirmation hearing to be continued to a later date in order to allow additional time for the debtor's attorney to resolve the outstanding issues.
If a confirmation hearing is held, the parties in interest, usually the debtor(s), the trustee, and the objecting creditor(s), will appear before the court and plead their case to the judge. Witnesses may be called and testimony taken. Based on the issue before the court and the testimony, if any, the judge may decide the issue at that time, may ask for additional briefing from the parties, or may hold his ruling in abeyance and set another hearing to resolve other preliminary or related matters before ruling on the issues addressed at the confirmation hearing. For more information on Chapter 13 in general, click here.
