§1322 — Title 11 Bankruptcy | U.S. Code

Summary

A repayment plan must give the trustee enough of the debtor’s future earnings or income to make the plan work. The plan must pay in full, by delayed cash payments, all claims that the law calls “priority” unless a creditor agrees to something different. If the plan sorts claims into classes, every claim in the same class must get the same treatment. The plan can pay less than full on claims covered by section 507(a)(1)(B) only if all of the debtor’s projected disposable income for a 5-year period starting when the first plan payment is due is used to make payments. The plan can also do many other things the code allows. It can group unsecured claims, change rights of secured or unsecured creditors (but generally not change a loan that is only the debtor’s main home), cure or waive defaults, set how payments are made, handle certain postpetition claims, assume or reject leases and contracts, pay claims from estate or debtor property, return estate property to the debtor, and pay post-filing interest on some nondischargeable unsecured claims only if disposable income is available. A mortgage default that caused a lien on the debtor’s home can be cured until the home is sold at a foreclosure sale under state law. To apply some rules, the plan compares annual income (monthly income times 12) to the state’s median family income for the household size. For households over four people, add $525 per month for each extra person. The amount needed to cure a default is set by the original agreement and state law. The plan may not change the terms of certain loans listed in 362(b)(19), and payments to repay those loans do not count as disposable income.

Title 11, §1322

Bankruptcy — Source: USLM XML via OLRC

(a)The plan—

(1)shall 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)shall 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;

(3)if the plan classifies claims, shall provide the same treatment for each claim within a particular class; and

(4)notwithstanding any other provision of this section, 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.

(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;

(10)provide for the payment of interest accruing after the date of the filing of the petition on unsecured claims that are nondischargeable under section 1328(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

(11)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)(1)If the current monthly income of the debtor and the debtor’s spouse combined, when multiplied by 12, is not less than—

(A)in the case of a debtor in a household of 1 person, the median family income of the applicable State for 1 earner;

(B)in the case of a debtor in a household of 2, 3, or 4 individuals, the highest median family income of the applicable State for a family of the same number or fewer individuals; or

(C)in the case of a debtor in a household exceeding 4 individuals, the highest median family income of the applicable State for a family of 4 or fewer individuals, plus $525 11 See Adjustment of Dollar Amounts notes below. per month for each individual in excess of 4,

(2)If the current monthly income of the debtor and the debtor’s spouse combined, when multiplied by 12, is less than—

(A)in the case of a debtor in a household of 1 person, the median family income of the applicable State for 1 earner;

(B)in the case of a debtor in a household of 2, 3, or 4 individuals, the highest median family income of the applicable State for a family of the same number or fewer individuals; or

(C)in the case of a debtor in a household exceeding 4 individuals, the highest median family income of the applicable State for a family of 4 or fewer individuals, plus $525 1 per month for each individual in excess of 4,

(e)Notwithstanding subsection (b)(2) of this section and section 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.

(f)A plan may not materially alter the terms of a loan described in section 362(b)(19) and any amounts required to repay such loan shall not constitute “disposable income” under section 1325.

Notes & Related Subsidiaries

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.

Editorial Notes

Amendments

2010—Subsec. (a). Pub. L. 111–327, § 2(a)(43)(A), struck out “shall” after “plan” in introductory provisions. Subsec. (a)(1) to (3). Pub. L. 111–327, § 2(a)(43)(B)–(D), inserted “shall” before “provide”. Subsec. (a)(4). Pub. L. 111–327, § 2(a)(43)(E), struck out “a plan” before “may provide”. 2005—Subsec. (a)(4). Pub. L. 109–8, § 213(8), added par. (4). Subsec. (b)(10), (11). Pub. L. 109–8, § 213(9), added par. (10) and redesignated former par. (10) as (11). Subsec. (d). Pub. L. 109–8, § 318(1), amended subsec. (d) generally. Prior to amendment, subsec. (d) read as follows: “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.” Subsec. (f). Pub. L. 109–8, § 224(d), added subsec. (f). 1994—Subsecs. (c), (d). Pub. L. 103–394, § 301, added subsec. (c) and redesignated former subsec. (c) as (d). Subsec. (e). Pub. L. 103–394, § 305(c), added subsec. (e). 1984—Subsec. (a)(2). Pub. L. 98–353, § 528(a), inserted a comma after “payments”. Subsec. (b)(1). Pub. L. 98–353, § 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, § 528(b)(1), inserted “, or leave unaffected the rights of the holders of any class of claims”. Subsec. (b)(4). Pub. L. 98–353, § 528(b)(2), inserted “other” after “claim or any”. Subsec. (b)(7). Pub. L. 98–353, § 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, § 528(b)(4), struck out “any” before “part of a claim”.

Statutory Notes and Related Subsidiaries

Effective Date

of 2005 AmendmentAmendment by 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 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 AmendmentAmendment 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. Court Rules and Judicial Documents Adjustment of Dollar AmountsThe dollar amounts specified in this section were adjusted by notices of the Judicial Conference of the United States pursuant to section 104 of this title as follows: By notice dated Jan. 30, 2025, 90 F.R. 8941, effective Apr. 1, 2025, in subsec. (d), dollar amount “825” was adjusted to “925” each time it appeared. See notice of the Judicial Conference of the United States set out as a note under section 104 of this title. By notice dated Jan. 31, 2022, 87 F.R. 6625, effective Apr. 1, 2022, in subsec. (d), dollar amount “750” was adjusted to “825” each time it appeared. By notice dated Feb. 5, 2019, 84 F.R. 3488, effective Apr. 1, 2019, in subsec. (d), dollar amount “700” was adjusted to “750” each time it appeared. By notice dated Feb. 16, 2016, 81 F.R. 8748, effective Apr. 1, 2016, in subsec. (d), dollar amount “675” was adjusted to “700” each time it appeared. By notice dated Feb. 12, 2013, 78 F.R. 12089, effective Apr. 1, 2013, in subsec. (d), dollar amount “625” was adjusted to “675” each time it appeared. By notice dated Feb. 19, 2010, 75 F.R. 8747, effective Apr. 1, 2010, in subsec. (d)(1)(C), (2)(C), dollar amount “575” was adjusted to “625”. By notice dated Feb. 7, 2007, 72 F.R. 7082, effective Apr. 1, 2007, in subsec. (d), dollar amount “525” was adjusted to “575” each time it appeared.

§1322 Contents of plan

Summary

Title 11, §1322

Notes & Related Subsidiaries

Historical and Revision Notes

Legislative Statements

senate report no. 95–989

Editorial Notes

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Effective Date

Effective Date

Effective Date

Citations & Metadata