Chapter 13 Rules

There are certain rules that must be followed when you file for Chapter 13 bankruptcy. Bankruptcy law is a set of federal laws and statutes governed by Title 11 of the United States Bankruptcy Code.

The debtor has the exclusive responsibility for filing a plan. Although most plans are filed at the time of the petition, the debtor has up to 15 days from the filing of the petition to file the plan, unless the court allows otherwise.The plan specifies what each creditor will be paid and under what terms. Chapter 13 creditors do not vote on the plan. A creditor should object to confirmation if the plan does not properly treat its claim. Sections 1322 and 1325 set mandatory and permissive requirements of a Chapter 13 plan and its confirmation, respectively.

The three mandatory requirements are that the plan shall provide for the submission of all or such portion of future earnings or other future income to the trustee as is necessary to fund the plan; the plan shall provide for the full payment, on a deferred basis of priority claims unless the holder of the claim agrees to different treatment and the plan may not be longer than three years unless the court approves a longer payment period, not to exceed five years. The debtor may deal with a secured claim outside the plan. A plan should not be confirmed, unless the priority claims are provided for in full, and the IRS should object to a plan that does not provide for full payment of priority taxes. In the event that the IRS does not object and a plan is confirmed without properly providing for priority taxes, the IRS can move to have the plan dismissed or modified.