§1222 Contents of Plan

Summary

A repayment plan must say how the debtor will turn over future earnings or other income to the trustee when needed to make the plan work. It must pay in full, by delayed cash payments, any claims that the law gives priority to under section 507 unless the creditor agrees otherwise. If the plan groups claims into classes, every claim in a class must be treated the same unless a creditor agrees to a worse deal. A plan can offer less than full payment for a claim listed in 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 pay the plan. The plan must also handle any government claims described under section 1232(a) as allowed by section 1232. A plan may sort unsecured claims into classes without unfair discrimination and may treat consumer debts differently when another person is also liable. It may change or keep the rights of secured or unsecured creditors, fix or waive defaults, let payments on unsecured and secured claims happen at the same time, and set reasonable schedules to cure defaults even if final payments end after the plan ends. It can assume, reject, or assign contracts and leases under section 365, pay claims from estate or debtor property, sell or distribute estate property, and vest property in the debtor or others when confirmed or later. The plan can pay post‑filing interest on certain nondischargeable unsecured claims under section 1228(a) only if disposable income remains after providing for full payment of all allowed claims. Plans normally run no longer than 3 years unless the court, for cause, approves up to 5 years. If the plan cures a default, the amount needed is set by the underlying agreement and nonbankruptcy law.