§1222 — Title 11 Bankruptcy | U.S. Code

Summary

A bankruptcy repayment plan must put enough of the debtor’s future earnings or other future income under the trustee’s control to make the plan work. The plan must pay all priority claims in full with deferred cash payments unless a creditor agrees otherwise. If the plan groups claims into classes, everyone in the same class must be treated the same unless a holder agrees to worse treatment. The plan can only pay less than full on certain priority claims under section 507(a)(1)(B) if all of the debtor’s projected disposable income for a five‑year period starting when the first payment is due is applied to the plan. The plan also must deal with claims by government units described in section 1232. A plan may also do many other things: group unsecured claims (without unfair discrimination), change or leave creditor rights alone, cure or waive defaults, make payments on different claims at the same time, assume or reject contracts and leases, use estate or debtor property to pay claims, sell or distribute estate property, set longer payment terms for secured claims, return estate property to the debtor or another entity, and pay post‑filing interest on certain nondischargeable unsecured claims if disposable income remains. Payments normally cannot last more than three years unless the court allows up to five years. If the plan cures a default, the amount needed to cure is decided by the original agreement and nonbankruptcy law.

Title 11, §1222

Bankruptcy — Source: USLM XML via OLRC

(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, unless the holder of a particular claim agrees to a different treatment of that claim;

(3)if the plan classifies claims and interests, provide the same treatment for each claim or interest within a particular class unless the holder of a particular claim or interest agrees to less favorable treatment;

(4)notwithstanding any other provision of this section, a plan may provide for less than full payment of all amounts owed for a claim entitled to priority under section 507(a)(1)(B) only if the plan provides that all of the debtor’s projected disposable income for a 5-year period beginning on the date that the first payment is due under the plan will be applied to make payments under the plan; and

(5)subject to section 1232, provide for the treatment of any claim by a governmental unit of a kind described in section 1232(a).

(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, 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)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)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;

(7)provide for the payment of all or part of a claim against the debtor from property of the estate or property of the debtor;

(8)provide for the sale of all or any part of the property of the estate or the distribution of all or any part of the property of the estate among those having an interest in such property;

(9)provide for payment of allowed secured claims consistent with section 1225(a)(5) of this title, over a period exceeding the period permitted under section 1222(c);

(10)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;

(11)provide for the payment of interest accruing after the date of the filing of the petition on unsecured claims that are nondischargeable under section 1228(a), except that such interest may be paid only to the extent that the debtor has disposable income available to pay such interest after making provision for full payment of all allowed claims; and

(12)include any other appropriate provision not inconsistent with this title.

(c)Except as provided in subsections (b)(5) and (b)(9), 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.

(d)Notwithstanding subsection (b)(2) of this section and section 506(b) and 1225(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.

Notes & Related Subsidiaries

Editorial Notes

Codification For repeal of section effective Oct. 1, 1998, and subsequent reenactment of section, see note set out preceding section 1201 of this title.

Amendments

2017—Subsec. (a)(2). Pub. L. 115–72, § 1005(b)(1)(A)(i), substituted “unless” for “unless—”, struck out subpar. (B) designation before “the holder”, and struck out subpar. (A) which read as follows: “the claim is a claim owed to a governmental unit that arises as a result of the sale, transfer, exchange, or other disposition of any farm asset used in the debtor’s farming operation, in which case the claim shall be treated as an unsecured claim that is not entitled to priority under section 507, but the debt shall be treated in such manner only if the debtor receives a discharge; or”. Subsec. (a)(5). Pub. L. 115–72, § 1005(b)(1)(A)(ii)–(iv), added par. (5). 2005—Subsec. (a)(2). Pub. L. 109–8, § 1003(a), amended par. (2) generally. Prior to amendment, par. (2) read as follows: “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;”. Subsec. (a)(4). Pub. L. 109–8, § 213(3), added par. (4). Subsec. (b)(11), (12). Pub. L. 109–8, § 213(4), added par. (11) and redesignated former par. (11) as (12). 1994—Subsec. (d). Pub. L. 103–394 added subsec. (d).

Statutory Notes and Related Subsidiaries

Effective Date

of 2017 Amendment Pub. L. 115–72, div. B, § 1005(c), Oct. 26, 2017, 131 Stat. 1234, provided that: “The

Amendments

made by this section [enacting section 1232 of this title and amending this section and section 1228 and 1229 of this title] shall apply to— “(1) any bankruptcy case—“(A) that is pending on the date of enactment of this Act [Oct. 26, 2017]; “(B) in which the plan under chapter 12 of title 11, United States Code, has not been confirmed on the date of enactment of this Act; and “(C) relating to which an order of discharge under section 1228 of title 11, United States Code, has not been entered; and “(2) any bankruptcy case that commences on or after the date of enactment of this Act.”

Effective Date

of 2005 Amendment Pub. L. 109–8, title X, § 1003(c), Apr. 20, 2005, 119 Stat. 186, provided that: “This section [amending this section and section 1231 of this title] and the

Amendments

made by this section shall take effect on the date of the enactment of this Act [Apr. 20, 2005] and shall not apply with respect to cases commenced under title 11 of the United States Code before such date.” Amendment by section 213(3), (4) of Pub. L. 109–8 effective 180 days after Apr. 20, 2005, and not applicable with respect to cases commenced under this title before such

Effective Date

, except as otherwise provided, see section 1501 of Pub. L. 109–8, set out as a note under section 101 of this title.

Effective Date

of 1994 AmendmentAmendment by 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

sPermanent reenactment of section effective July 1, 2005, see section 1001(a)(2) of Pub. L. 109–8, set out as a Repeal, Reenactment, and Termination of Chapter note under section 1201 of this title. For

Effective Date

s of section and

Amendments

extending periods for which section was reenacted prior to permanent reenactment, see

Effective Date

and

Effective Date

of 1999, 2001, 2002, 2003, and 2004 Amendment notes set out under section 1201 of this title.

§1222 Contents of plan

Summary

Title 11, §1222

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Citations & Metadata