THE CHAPTER 13
PLAN AND CONFIRMATION HEARING (Page
The plan must pay priority claims in full
unless a particular priority creditor agrees to different
treatment of the claim or, in the case of a domestic support
obligation, unless the debtor contributes all “disposable income”
- discussed below - to a five-year plan. 11 U.S.C. § 1322(a).
If the debtor wants to keep the collateral
securing a particular claim, the plan must provide that the holder
of the secured claim receive at least the value of the collateral.
If the obligation underlying the secured claim was used the buy
the collateral (e.g., a car loan), and the debt was incurred
within certain time frames before the bankruptcy filing, the plan
must provide for full payment of the debt, not just the value of
the collateral (which may be less due to depreciation). Payments
to certain secured creditors (i.e., the home mortgage lender), may
be made over the original loan repayment schedule (which may be
longer than the plan) so long as any arrearage is made up during
the plan. The debtor should consult an attorney to determine the
proper treatment of secured claims in the plan.