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Chapter 13 plans
Chapter 13 plan
A Chapter 13 plan, or Chapter 13 repayment plan, is the debtor's detailed proposal for how creditors will be paid over time, usually three to five years, through regular payments to a trustee. 1 2
Talk to a lawyerWhat does a Chapter 13 plan have to do?
The plan goes on Official Form 113 unless the court has adopted its own local plan form. It provides for fixed payments to the trustee on a regular basis, typically biweekly or monthly, and the trustee pays creditors according to its terms. 3 2
The plan must pay priority claims in full unless the creditor agrees otherwise. It need not pay unsecured claims in full, as long as the debtor pays all projected disposable income over the plan period and unsecured creditors get at least what a Chapter 7 liquidation would give them. 4 2
For secured debts, a plan may cure a default, such as missed mortgage payments, within a reasonable time while regular payments continue, and it can reschedule secured debts other than a mortgage on the main home. 4 2
The trustee's percentage fee comes out of the plan payments. The Attorney General sets it, and for a debtor who is not a family farmer it cannot exceed ten percent. Once confirmed, the plan binds the debtor and each creditor. 5 2
What are the key dates?
| Step | When |
|---|---|
| File the plan 3 | With the petition or within 14 days after it, unless the court extends the time 3 |
| First payment to the trustee 2 | Within 30 days after filing, even before the plan is approved 2 |
| Confirmation hearing 2 | No later than 45 days after the meeting of creditors 2 |
| Plan length 2 | Generally three years below the state median income and five years above it, never more than five 2 |
General rules only. Local rules and your court's orders control the dates in your case.
Common questions
What if I can't afford my Chapter 13 payments?
The plan can be modified before or after confirmation. If it cannot be finished for reasons beyond your control and a change is not possible, the court may grant a narrower hardship discharge. Missed payments can lead to dismissal or conversion to Chapter 7. 2
Is any debt forgiven in Chapter 13?
Yes, in part. Unsecured creditors may receive less than full payment, and the discharge at the end releases the debts provided for by the plan, with limited exceptions. 2
Can I take on new debt during the plan?
Not without consulting the trustee. 2
Sources
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