Failure to Confirm
I met with a client today who was worried because he got a notice in the mail from the Trustee’s office for a Motion to Dismiss for Failure to Confirm (FTC). Our office had also received the notice and sent out a letter to the client to let him know the issue had been resolved and his case was not in danger of being dismissed.
The reason the Trustee will issue an FTC is to make sure the case moves along and that the Chapter 13 plan gets confirmed in a timely matter. Most creditors don’t get paid anything until the case gets confirmed, so there is a need to get the case confirmed and not let it just remain unconfirmed for a long period of time.
The reason a case might not get confirmed timely is because an amended plan is filed because a Debtor changes his mind about what is going to be paid in the bankruptcy or because an Agreement is entered with a Creditor that requires the Debtor to file an amended Chapter 13 plan. Another reason is if the Chapter 13 plan confirmation is denied for some reason. If the confirmation is denied, the Debtor must file an amended plan to prevent that case from being dismissed.
I explained to my client that the FTC didn’t mean the Trustee necessarily wanted to dismiss his case, but that it is a tool to make sure the case gets confirmed in a timely matter. It does not mean the Debtor or the Attorney have done something wrong.
