11 USC 1225 - Confirmation of plan

U.S Code last checked for updates: Nov 22, 2024

§ 1225.

Confirmation of plan

(a)

Except as provided in subsection (b), the court shall confirm a plan if—

(1)

the plan complies with the provisions of this chapter and with the other applicable provisions of this title;

(2)

any fee, charge, or amount required under chapter 123 of title 28, or by the plan, to be paid before confirmation, has been paid;

(3)

the plan has been proposed in good faith and not by any means forbidden by law;

(4)

the value, as of the effective date of the plan, of property to be distributed under the plan on account of each allowed unsecured claim is not less than the amount that would be paid on such claim if the estate of the debtor were liquidated under chapter 7 of this title on such date;

(5)

with respect to each allowed secured claim provided for by the plan—

(A)

the holder of such claim has accepted the plan;

(B)

(i)

the plan provides that the holder of such claim retain the lien securing such claim; and

(ii)

the value, as of the effective date of the plan, of property to be distributed by the trustee or the debtor under the plan on account of such claim is not less than the allowed amount of such claim; or

(C)

the debtor surrenders the property securing such claim to such holder;

(6)

the debtor will be able to make all payments under the plan and to comply with the plan; and

(7)

the debtor has paid all amounts that are required to be paid under a domestic support obligation and that first become payable after the date of the filing of the petition if the debtor is required by a judicial or administrative order, or by statute, to pay such domestic support obligation.

(b)

(1)

If the trustee or the holder of an allowed unsecured claim objects to the confirmation of the plan, then the court may not approve the plan unless, as of the effective date of the plan—

(A)

the value of the property to be distributed under the plan on account of such claim is not less than the amount of such claim;

(B)

the plan provides that all of the debtor’s projected disposable income to be received in the three-year period, or such longer period as the court may approve under section 1222(c), beginning on the date that the first payment is due under the plan will be applied to make payments under the plan; or

(C)

the value of the property to be distributed under the plan in the 3-year period, or such longer period as the court may approve under section 1222(c), beginning on the date that the first distribution is due under the plan is not less than the debtor’s projected disposable income for such period.

(2)

For purposes of this subsection, “disposable income” means income which is received by the debtor and which is not reasonably necessary to be expended—

(A)

for the maintenance or support of the debtor or a dependent of the debtor or for a domestic support obligation that first becomes payable after the date of the filing of the petition; or

(B)

for the payment of expenditures necessary for the continuation, preservation, and operation of the debtor’s business.

(c)

After confirmation of a plan, the court may order any entity from whom the debtor receives income to pay all or any part of such income to the trustee.

(Added and amended Pub. L. 99–554, title II, § 255, title III, § 302(f), Oct. 27, 1986, 100 Stat. 3110, 3124; Pub. L. 103–65, § 1, Aug. 6, 1993, 107 Stat. 311; Pub. L. 105–277, div. C, title I, § 149(a), Oct. 21, 1998, 112 Stat. 2681–610; Pub. L. 106–5, § 1(1), (2), Mar. 30, 1999, 113 Stat. 9; Pub. L. 106–70, § 1, Oct. 9, 1999, 113 Stat. 1031; Pub. L. 107–8, § 1, May 11, 2001, 115 Stat. 10; Pub. L. 107–17, § 1, June 26, 2001, 115 Stat. 151; Pub. L. 107–170, § 1, May 7, 2002, 116 Stat. 133; Pub. L. 107–171, title X, § 10814(a), May 13, 2002, 116 Stat. 532; Pub. L. 107–377, § 2(a), Dec. 19, 2002, 116 Stat. 3115; Pub. L. 108–73, § 2(a), Aug. 15, 2003, 117 Stat. 891; Pub. L. 108–369, § 2(a), Oct. 25, 2004, 118 Stat. 1749; Pub. L. 109–8, title II, §§ 213(5), 218, title X, §§ 1001(a)(1), (c), 1006(a), Apr. 20, 2005, 119 Stat. 52, 55, 185–187; Pub. L. 116–260, div. N, title III, § 320(d), (f)(2)(A)(iv), Dec. 27, 2020, 134 Stat. 2016, 2017.)

cite as: 11 USC 1225