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Florida Bankruptcy Lawyer: What does Plan Confirmation mean?

When a debtor files Chapter 13 Bankruptcy relief, they are seeking a confirmation of a plan which is basically a pathway that is proposed by their attorney to reach his/her goals, obtaining an Order from the Court for confirmation of the plan which will then establish the rights of all the parties involved, including creditors.
This Order of confirmation, establishes the rights, duties and obligations of all parties and bind the debtor and each creditor even if any particular creditor is provided for, has objected to or has accepted the plan. When a Petition for bankruptcy is filed, the law establishes an estate of all property belonging to the debtor that is managed by the Trustee. The confirmation of the plan reinvests all the property of the estate back to the debtor which, unless specifically provided for within the plan, becomes free and clear of any claim or interest of any creditor provided for within the plan.

The plan must be filed in good faith and comply with all bankruptcy laws which mandate certain requirements but maintains the flexibility so that debtors may formulate a plan that enables them to keep property, stop foreclosure, repossessions, garnishments, attachments, catch up on missed payments, reduce interest rates on certain creditors, in specific circumstances, strip off liens and reduce the amount of unsecured debt being repaid over a period of time.

So long as the plan complies with the aforementioned and is feasible, meaning the debtor has the funds necessary to comply with the terms of the plan, it would likely get confirmed. It is also possible, with changed circumstances for the debtor to request a modification of the plan, such as when there is a substantial change in income.

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