Bankruptcy Forms: Filing Bankruptcy Chapter 7 Bankruptcy Software Chapter 13

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TITLE 11–BANKRUPTCY

CHAPTER 13– ADJUSTMENT OF DEBTS OF AN INDIVIDUAL WITH REGULAR INCOME

Sub Chapter II – The Plan

Sec. 1322. Contents of plan

 (a) The plan shall--
        (1) provide for the submission of all or such portion of future 
    earnings or other future income of the debtor to the supervision and 
    control of the trustee as is necessary for the execution of the 
    plan;
        (2) provide for the full payment, in deferred cash payments, of 
    all claims entitled to priority under section 507 of this title, 
    unless the holder of a particular claim agrees to a different 
    treatment of such claim; and
        (3) if the plan classifies claims, provide the same treatment 
    for each claim within a particular class.

    (b) Subject to subsections (a) and (c) of this section, the plan 
may--
        (1) designate a class or classes of unsecured claims, as 
    provided in section 1122 of this title, but may not discriminate 
    unfairly against any class so designated; however, such plan may 
    treat claims for a consumer debt of the debtor if an individual is 
    liable on such consumer debt with the debtor differently than other 
    unsecured claims;
        (2) modify the rights of holders of secured claims, other than a 
    claim secured only by a security interest in real property that is 
    the debtor's principal residence, or of holders of unsecured claims, 
    or leave unaffected the rights of holders of any class of claims;
        (3) provide for the curing or waiving of any default;
        (4) provide for payments on any unsecured claim to be made 
    concurrently with payments on any secured claim or any other 
    unsecured claim;
        (5) notwithstanding paragraph (2) of this subsection, provide 
    for the curing of any default within a reasonable time and 
    maintenance of payments while the case is pending on any unsecured 
    claim or secured claim on which the last payment is due after the 
    date on which the final payment under the plan is due;
        (6) provide for the payment of all or any part of any claim 
    allowed under section 1305 of this title;
        (7) subject to section 365 of this title, provide for the 
    assumption, rejection, or assignment of any executory contract or 
    unexpired lease of the debtor not previously rejected under such 
    section;
        (8) provide for the payment of all or part of a claim against 
    the debtor from property of the estate or property of the debtor;
        (9) provide for the vesting of property of the estate, on 
    confirmation of the plan or at a later time, in the debtor or in any 
    other entity; and
        (10) include any other appropriate provision not inconsistent 
    with this title.

    (c) Notwithstanding subsection (b)(2) and applicable nonbankruptcy 
law--
        (1) a default with respect to, or that gave rise to, a lien on 
    the debtor's principal residence may be cured under paragraph (3) or 
    (5) of subsection (b) until such residence is sold at a foreclosure 
    sale that is conducted in accordance with applicable nonbankruptcy 
    law; and
        (2) in a case in which the last payment on the original payment 
    schedule for a claim secured only by a security interest in real 
    property that is the debtor's principal residence is due before the 
    date on which the final payment under the plan is due, the plan may 
    provide for the payment of the claim as modified pursuant to section 
    1325(a)(5) of this title.

    (d) The plan may not provide for payments over a period that is 
longer than three years, unless the court, for cause, approves a longer 
period, but the court may not approve a period that is longer than five 
years.
    (e) Notwithstanding subsection (b)(2) of this section and sections 
506(b) and 1325(a)(5) of this title, if it is proposed in a plan to cure 
a default, the amount necessary to cure the default, shall be determined 
in accordance with the underlying agreement and applicable nonbankruptcy 
law.

(Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2648; Pub. L. 98-353, title III, 
Secs. 316, 528, July 10, 1984, 98 Stat. 356, 389; Pub. L. 103-394, title 
III, Secs. 301, 305(c), Oct. 22, 1994, 108 Stat. 4131, 4134.)


                      Historical and Revision Notes

                         legislative statements

    Section 1322(b)(2) of the House amendment represents a compromise 
agreement between similar provisions in the House bill and Senate 
amendment. Under the House amendment, the plan may modify the rights of 
holders of secured claims other than a claim secured by a security 
interest in real property that is the debtor's principal residence. It 
is intended that a claim secured by the debtor's principal residence may 
be treated with under section 1322(b)(5) of the House amendment.
    Section 1322(c) adopts a 5-year period derived from the House bill 
in preference to a 4-year period contained in the Senate amendment. A 
conforming change is made in section 1329(c) adopting the provision in 
the House bill in preference to a comparable provision in the Senate 
amendment.
    Tax payments in wage earner plans: The House bill provided that a 
wage earner plan had to provide that all priority claims would be paid 
in full. The Senate amendment contained a special rule in section 
1325(c) requiring that Federal tax claims must be paid in cash, but that 
such tax claims can be paid in deferred cash installments under the 
general rules applicable to the payment of debts in a wage earner plan, 
unless the Internal Revenue Service negotiates with the debtor for some 
different medium or time for payment of the tax liability.
    The House bill adopts the substance of the Senate amendment rule 
under section 1322(a)(2) of the House amendment. A wage earner plan must 
provide for full payment in deferred cash payments, of all priority 
claims, unless the holder of a particular claim agrees with a different 
treatment of such claim.


                        senate report no. 95-989

    Chapter 13 is designed to serve as a flexible vehicle for the 
repayment of part or all of the allowed claims of the debtor. Section 
1322 emphasizes that purpose by fixing a minimum of mandatory plan 
provisions.
    Subsection (a) requires that the plan submit whatever portion of the 
future income of the debtor is necessary to implement the plan to the 
control of the trustee, mandates payment in full of all section 507 
priority claims, and requires identical treatment for all claims of a 
particular class.
    Subsection (b) permits a chapter 13 plan to (1) divide unsecured 
claims not entitled to priority under section 507 into classes in the 
manner authorized for chapter 11 claims; (2) modify the rights of 
holders of secured and unsecured claims, except claims wholly secured by 
real estate mortgages; (3) cure or waive any default; (4) propose 
payments on unsecured claims concurrently with payments on any secured 
claim or any other class of unsecured claims; (5) provide for curing any 
default on any secured or unsecured claim on which the final payment is 
due after the proposed final payment under the plan; (6) provide for 
payment of any allowed postpetition claim; (7) assume or reject any 
previously unrejected executory contract or unexpired lease of the 
debtor; (8) propose the payment of all or any part of any claim from 
property of the estate or of the debtor; (9) provide for the vesting of 
property of the estate; and (10) include any other provision not 
inconsistent with other provisions of title 11.
    Subsection (c) limits the payment period under the plan to 3 years, 
except that a 4-year payment period may be permitted by the court.


                               Amendments

    1994--Subsecs. (c), (d). Pub. L. 103-394, Sec. 301, added subsec. 
(c) and redesignated former subsec. (c) as (d).
    Subsec. (e). Pub. L. 103-394, Sec. 305(c), added subsec. (e).
    1984--Subsec. (a)(2). Pub. L. 98-353, Sec. 528(a), inserted a comma 
after ``payments''.
    Subsec. (b)(1). Pub. L. 98-353, Sec. 316, inserted ``; however, such 
plan may treat claims for a consumer debt of the debtor if an individual 
is liable on such consumer debt with the debtor differently than other 
unsecured claims''.
    Subsec. (b)(2). Pub. L. 98-353, Sec. 528(b)(1), inserted ``, or 
leave unaffected the rights of the holders of any class of claims''.
    Subsec. (b)(4). Pub. L. 98-353, Sec. 528(b)(2), inserted ``other'' 
after ``claim or any''.
    Subsec. (b)(7). Pub. L. 98-353, Sec. 528(b)(3), inserted ``subject 
to section 365 of this title,'' before ``provide'', substituted ``, 
rejection, or assignment'' for ``or rejection'', and substituted ``under 
such section'' for ``under section 365 of this title''.
    Subsec. (b)(8). Pub. L. 98-353, Sec. 528(b)(4), struck out ``any'' 
before ``part of a claim''.


                    Effective Date of 1994 Amendment

    Amendment by section 301 of Pub. L. 103-394 effective Oct. 22, 1994, 
and not applicable with respect to cases commenced under this title 
before Oct. 22, 1994, and amendment by section 305(c) of Pub. L. 103-394 
effective Oct. 22, 1994, and applicable only to agreements entered into 
after Oct. 22, 1994, see section 702 of Pub. L. 103-394, set out as a 
note under section 101 of this title.


                    Effective Date of 1984 Amendment

    Amendment by Pub. L. 98-353 effective with respect to cases filed 90 
days after July 10, 1984, see section 552(a) of Pub. L. 98-353, set out 
as a note under section 101 of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 1323, 1328, 1329 of this 
title.


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Legal Resource Center: United States Code TITLE 11 Filing Bankruptcy Forms Software