How do the Chapter 12 bankruptcy confirmation and discharge processes work?Bankruptcy procedures vary from district to district according to local rules, which change often. You and your bankruptcy lawyer should check the local rules for your district governing confirmation and discharge. In general, however, the Chapter 12 bankruptcy confirmation and discharge processes operate as follows:
ConfirmationThe court will set a hearing to confirm the bankruptcy plan within 45 days of filing the plan. The plan will be confirmed if:
- It complies with the Bankruptcy Code.
- All fees due have been paid.
- The plan is prepared in good faith.
- The value of the payments is not less than it would be under a Chapter 7 case.
- The debtor (you) can make the payments under the plan.
- The plan provides that the creditor of a secured claim retains the lien securing the debt, and you surrender the property securing the claim.
- You have paid all domestic obligations.
DischargeYou (the debtor) are discharged upon completion of all payments pursuant to the plan. If you have a domestic support obligation, you must certify that all domestic support payments have been paid. If all payments are not made, you may obtain a discharge if:
- You are unable to complete the payments due to circumstances beyond your control.
- The value of the payments is not less than would have been made under a Chapter 7.
- Modification of the plan is not feasible.
- Exceeded your homestead exemption.
- Committed any criminal act, intentional tort, or reckless misconduct.
- Incurred any debt that arises from fraud or deceit when you acted in a fiduciary capacity.
- Violated any federal securities law.
- Been convicted of a felony, or have a felony proceeding pending.