My current location: Los Angeles, CA | Change location
Featured Legal Services
Hagen & Hagen Devoted 100% To Bankruptcy, Reorganization, Debtor/Creditor Rights, and Assignments .
(818) 501-6161

Chapter 13: Repayment Plan and Confirmation Hearing


"Unsecured" Claims Under the Repayment Plan

The plan need not pay unsecured claims in full as long it provides that the debtor will pay all projected "disposable income" over an "applicable commitment period," and as long as unsecured creditors receive at least as much under the plan as they would receive if the debtor's assets were liquidated under chapter 7. In chapter 13, "disposable income" is income (other than child support payments received by the debtor) less amounts reasonably necessary for the maintenance or support of the debtor or dependents and less charitable contributions up to 15% of the debtor's gross income. If the debtor operates a business, the definition of disposable income excludes those amounts which are necessary for ordinary operating expenses. The "applicable commitment period" depends on the debtor's current monthly income. The applicable commitment period must be three years if current monthly income is less than the state median for a family of the same size - and five years if the current monthly income is greater than a family of the same size. The plan may be less than the applicable commitment period (three or five years) only if unsecured debt is paid in full over a shorter period.

The Confirmation Hearing

No later than 45 days after the meeting of creditors, the bankruptcy judge must hold a confirmation hearing and decide whether the plan is feasible and meets the standards for confirmation set forth in the Bankruptcy Code. Creditors will receive 25 days' notice of the hearing and may object to confirmation. While a variety of objections may be made, the most frequent ones are that payments offered under the plan are less than creditors would receive if the debtor's assets were liquidated or that the debtor's plan does not commit all of the debtor's projected disposable income for the three or five year applicable commitment period.

If the court confirms the plan, the chapter 13 trustee will distribute funds received under the plan "as soon as is practicable." If the court declines to confirm the plan, the debtor may file a modified plan. The debtor may also convert the case to a liquidation case under chapter 7 (A fee of $15 is charged for converting a

From the Administrative Office of the U.S. Courts


Featured Legal Services
Filing for Bankruptcy? Get started now with bankruptcy guides and forms.
Sponsored Services
FREE Debt Relief Consultation.
Get Free Expert Advice eliminating Credit Card debt. (866) 404-3771
More Sponsored Services
Wills, Divorce, Incorporation & More - Legalzoom:
Fast and friendly legal document service from LegalZoom, the #1 online legal document service
Legal Documents
Legal Ace.com offers turn key legal documents at affordable prices for business law, incorporations, trademarks, copyrights, wills, divorce and more.
USLegalForms.com - Largest Selection of Legal Forms on The Internet:
Download more than 50,000 state-specific legal forms. Real estate documents, power of attorney forms, wills, employment contracts, divorce and separation agreements and much more.