Chapter 13 Plan Contents: Section 1322

The Chapter 13 plan is the blueprint for repaying debts over three to five years. Section 1322 defines what the plan must include, what it may include, and what it cannot do. Understanding these rules is essential for anyone proposing or evaluating a Chapter 13 plan.

Required provisions: Section 1322(a)

Section 1322(a) sets out three mandatory requirements that every Chapter 13 plan must satisfy:

In plain terms:

1. Income commitment. The debtor must commit a portion of future income to fund the plan. Plan payments are typically made to the Chapter 13 trustee, who distributes funds to creditors.
2. Priority claims paid in full. Priority debts -- including certain taxes, domestic support obligations, and administrative expenses -- must be paid in full unless the creditor agrees to less.
3. Equal treatment within classes. If the plan groups claims into classes, each claim in the same class must receive the same treatment.

Permissive provisions: Section 1322(b)

Section 1322(b) lists provisions that the plan may include. These are the tools that make Chapter 13 flexible and powerful:

Classifying claims: 1322(b)(1)

The plan may designate classes of unsecured claims. This allows the debtor to treat different types of unsecured creditors differently, as long as the plan does not discriminate unfairly. Common uses include separately classifying co-signed debts (to protect a co-debtor) or student loans.

Modifying secured claims: 1322(b)(2)

The plan may modify the rights of holders of secured claims, except for claims secured only by a security interest in the debtor's principal residence. This exception is one of the most litigated provisions in Chapter 13 law.

Curing defaults: 1322(b)(3) and 1322(b)(5)

The plan may cure any default on a secured or unsecured claim. Section 1322(b)(5) specifically allows the plan to cure defaults on long-term obligations (those with a final payment due after the last plan payment) while maintaining regular payments. This is the provision that allows homeowners to catch up on missed mortgage payments through the plan.

Payment of claims from property of the estate: 1322(b)(8)-(9)

The plan may provide for payments on unsecured claims from property of the estate or property of the debtor, and may vest property of the estate in the debtor or another entity upon confirmation.

Other permissive provisions

• 1322(b)(4): Payment of interest on nondischargeable unsecured claims (like certain taxes or student loans).
• 1322(b)(6): Payment of postpetition claims allowed under Section 1305 (claims for taxes and consumer debts incurred after filing).
• 1322(b)(7): Assumption or rejection of executory contracts and unexpired leases.
• 1322(b)(10): Providing for the waiving of applicable finance or other charges on unsecured claims.
• 1322(b)(11): Providing for the payment of interest on claims to the extent that the plan provides for the cure of a default and maintenance of payments under Section 1322(b)(5).

Plan length: Section 1322(d)

A Chapter 13 plan may not provide for payments over a period longer than five years (60 months). The "applicable commitment period" -- the minimum plan length -- depends on the debtor's income:

Debtor Income	Minimum Plan Length	Maximum Plan Length
Below state median	3 years (36 months)	5 years (60 months)
At or above state median	5 years (60 months)	5 years (60 months)

The minimum plan length is enforced through Section 1325(b), which requires that the plan commit all "projected disposable income" for the applicable commitment period. A below-median debtor who pays all unsecured creditors in full can confirm a plan shorter than three years.

Limitations: Section 1322(c) and (e)

Last payment before final due date: 1322(c)(1)

A plan may provide for the payment of a claim secured by the debtor's principal residence even if the final payment is due before the final plan payment, provided the plan payments are in equal monthly amounts. This addresses situations where a mortgage or home equity loan matures during the plan period.

Adequate protection for purchase-money vehicles: 1322(c)(2)

If the debtor proposes to retain a vehicle and cure a default on the vehicle loan, the plan may provide for adequate protection payments during the cure period. The "hanging paragraph" after Section 1325(a)(9) (added by BAPCPA) imposes special rules for vehicles purchased within 910 days of filing.

Applicable commitment period: 1322(d)

How the plan interacts with confirmation

Proposing a plan is only the first step. The plan must also satisfy the confirmation requirements of Section 1325, which include:

• Good faith: The plan must have been proposed in good faith (Section 1325(a)(3)).
• Best interests of creditors: Unsecured creditors must receive at least as much as they would in a Chapter 7 liquidation (Section 1325(a)(4)).
• Disposable income: If the trustee or an unsecured creditor objects, the plan must commit all projected disposable income for the applicable commitment period (Section 1325(b)).
• Feasibility: The debtor must be able to make the proposed payments (Section 1325(a)(6)).

Plan modification: Section 1329

After confirmation, the plan can be modified at the request of the debtor, the trustee, or an unsecured creditor. Section 1329 allows modifications to increase or decrease the plan payment, extend or reduce the plan term (not beyond five years from the first payment), or alter the amount of distribution to a particular class. This flexibility is an important feature of Chapter 13 -- if the debtor's financial circumstances change (job loss, raise, medical emergency), the plan can be adjusted.

Related sections of the Bankruptcy Code

Section	Subject	Relevance
1322(a)	Required plan provisions	Income commitment, priority claims, equal treatment
1322(b)	Permissive plan provisions	Classification, modification, cure, lien avoidance
1322(d)	Plan length limits	3-year minimum or 5-year minimum based on income; 5-year max
1325	Confirmation requirements	Good faith, best interests, disposable income, feasibility
1329	Plan modification	Changes after confirmation
507	Priority claims	Claims that must be paid in full under the plan
1328	Discharge	Discharge granted upon completion of plan payments

Related resources

• Chapter 13 Overview -- How Chapter 13 repayment plan bankruptcy works
• Chapter 13 Failure Rate -- National data on plan completion rates
• Section 1328(f) Explained -- The discharge bar for repeat filers in Chapter 13
• Section 341 Meeting of Creditors -- The required hearing in every bankruptcy case
• Section 362 Automatic Stay -- Protection from creditors during the case
• Before You File -- What to know before starting a bankruptcy case
• Bankruptcy Glossary -- Plain-English definitions of bankruptcy terms

Legal references

• 11 U.S.C. Section 1322 -- Contents of plan
• 11 U.S.C. Section 1325 -- Confirmation of plan
• 11 U.S.C. Section 1329 -- Modification of plan after confirmation
• 11 U.S.C. Section 507 -- Priorities
• Chapter 13 Bankruptcy Basics -- U.S. Courts

Related Statutes

• §1325: Plan Confirmation
• §506: Secured Claims
• §362: Automatic Stay