Chapter 13 Repayment Plan

Understanding plan mechanics under 11 U.S.C. Sections 1322 and 1325

Must Be Paid in Full

Priority claims under Section 507 must be paid 100% through the Chapter 13 plan. This is a confirmation requirement under Section 1322(a)(2). The plan cannot be confirmed if it does not provide for full payment of priority claims.

Common Priority Debts

Domestic support obligations (507(a)(1)) -- child support, alimony, maintenance. These have the highest priority.

Certain tax claims (507(a)(8)) -- income taxes for returns due within 3 years, assessed within 240 days, with returns filed within 2 years.

Administrative expenses (507(a)(2)) -- attorney fees approved by the court, trustee fees.

Impact on Plan Feasibility

Large priority claims can make a plan infeasible. If you owe $30,000 in priority taxes over a 5-year plan, that alone requires $500/month before any other creditors are paid. If your disposable income cannot cover priority claims plus trustee fees plus secured debt payments, the plan cannot be confirmed.

Learn about the full Chapter 13 plan

Chapter 13 Plan Guide

Related Resources

Section 1328 Discharge -- Chapter 13 discharge rules and the superdischarge

Lien Stripping -- How to remove underwater junior liens in Chapter 13

Hardship Discharge -- Section 1328(b) discharge when you cannot complete your plan

Federal Rules Committee

This research supports Suggestion 26-BK-3 to the Advisory Committee on Bankruptcy Rules

Proposing automated Section 1328(f) discharge bar screening in federal bankruptcy courts