11 U.S.C. § 1326 — Payments

Page 319 TITLE 11—BANKRUPTCY § 1326 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, including charitable contributions (that meet the definition of ‘charitable contribution’ under section 548(d)(3)) to a qualified religious or charitable entity or organization (as that term is defined in section 548(d)(4)) in an amount not to exceed 15 percent of the gross income of the debtor for the year in which the contributions are made; and ‘‘(B) if the debtor is engaged in business, for the payment of expenditures necessary for the continu- ation, preservation, and operation of such business.’’ Subsec. (b)(4). Pub. L. 109–8, § 318(3), added par. (4). 1998—Subsec. (b)(2)(A). Pub. L. 105–183 inserted before semicolon ‘‘, including charitable contributions (that meet the definition of ‘charitable contribution’ under section 548(d)(3)) to a qualified religious or charitable entity or organization (as that term is defined in sec- tion 548(d)(4)) in an amount not to exceed 15 percent of the gross income of the debtor for the year in which the contributions are made’’. 1986—Subsec. (b)(2)(A). Pub. L. 99–554 substituted ‘‘; and’’ for ‘‘; or’’. 1984—Subsec. (a). Pub. L. 98–353, § 317(1), substituted ‘‘Except as provided in subsection (b), the’’ for ‘‘The’’. Subsec. (a)(1). Pub. L. 98–353, § 530, inserted ‘‘the’’ be- fore ‘‘other’’. Subsecs. (b), (c). Pub. L. 98–353, § 317(2), (3), added sub- sec. (b) and redesignated former subsec. (b) as (c). Statutory Notes and Related Subsidiaries EFFECTIVE AND TERMINATION DATES OF 2020 AMENDMENT Amendment by section 320(e) of div. N of Pub. L. 116–260 effective on the date on which the Adminis- trator of the Small Business Administration submits to the Director of the Executive Office for United States Trustees a written determination relating to loan eligi- bility under pars. (36) and (37) of section 636(a) of Title 15, Commerce and Trade, and applicable to any case pending on or commenced on or after such date, and amendment by section 320(f)(2)(A)(v) of div. N of Pub. L. 116–260, relating to repeal of such amendment if it be- came effective, effective two years after Dec. 27, 2020, see section 320(f) of Pub. L. 116–260, set out as a note under section 364 of this title. [Pursuant to 15 U.S.C. 636(a)(36)(A)(iii), the ‘‘cov- ered period’’ for loans under the Paycheck Protection Program ended on June 30, 2021.] Amendment by section 1113(b)(2)(A)(ii) of Pub. L. 116–136, effective 2 years after Mar. 27, 2020, see section 1113(b)(2)(B) of Pub. L. 116–136, set out as a note under section 101 of this title. EFFECTIVE DATE OF 2005 AMENDMENT Amendment by Pub. L. 109–8 effective 180 days after Apr. 20, 2005, and not applicable with respect to cases commenced under this title before such effective date, except as otherwise provided, see section 1501 of Pub. L. 109–8, set out as a note under section 101 of this title. EFFECTIVE DATE OF 1998 AMENDMENT Amendment by Pub. L. 105–183 applicable to any case brought under an applicable provision of this title that is pending or commenced on or after June 19, 1998, see section 5 of Pub. L. 105–183, set out as a note under sec- tion 544 of this title. EFFECTIVE DATE OF 1986 AMENDMENT Amendment by Pub. L. 99–554 effective 30 days after Oct. 27, 1986, see section 302(a) of Pub. L. 99–554, set out as a note under section 581 of Title 28, Judiciary and Judicial Procedure. EFFECTIVE DATE OF 1984 AMENDMENT Amendment by Pub. L. 98–353 effective with respect to cases filed 90 days after July 10, 1984, see section 552(a) of Pub. L. 98–353, set out as a note under section 101 of this title. Court Rules and Judicial Documents ADJUSTMENT OF DOLLAR AMOUNTS The dollar amounts specified in this section were ad- justed by notices of the Judicial Conference of the United States pursuant to section 104 of this title as follows: By notice dated Jan. 31, 2022, 87 F.R. 6625, effective Apr. 1, 2022, in subsec. (b), dollar amount ‘‘750’’ was ad- justed to ‘‘825’’ each time it appeared. See notice of the Judicial Conference of the United States set out as a note under section 104 of this title. By notice dated Feb. 5, 2019, 84 F.R. 3488, effective Apr. 1, 2019, in subsec. (b), dollar amount ‘‘700’’ was ad- justed to ‘‘750’’ each time it appeared. By notice dated Feb. 16, 2016, 81 F.R. 8748, effective Apr. 1, 2016, in subsec. (b), dollar amount ‘‘675’’ was ad- justed to ‘‘700’’ each time it appeared. By notice dated Feb. 12, 2013, 78 F.R. 12089, effective Apr. 1, 2013, in subsec. (b), dollar amount ‘‘625’’ was ad- justed to ‘‘675’’ each time it appeared. By notice dated Feb. 19, 2010, 75 F.R. 8747, effective Apr. 1, 2010, in subsec. (b)(3), (4), dollar amount ‘‘575’’ was adjusted to ‘‘625’’. By notice dated Feb. 7, 2007, 72 F.R. 7082, effective Apr. 1, 2007, in subsec. (b), dollar amount ‘‘525’’ was ad- justed to ‘‘575’’ each time it appeared. § 1326. Payments (a)(1) Unless the court orders otherwise, the debtor shall commence making payments not later than 30 days after the date of the filing of the plan or the order for relief, whichever is ear- lier, in the amount— (A) proposed by the plan to the trustee; (B) scheduled in a lease of personal property directly to the lessor for that portion of the obligation that becomes due after the order for relief, reducing the payments under sub- paragraph (A) by the amount so paid and pro- viding the trustee with evidence of such pay- ment, including the amount and date of pay- ment; and (C) that provides adequate protection di- rectly to a creditor holding an allowed claim secured by personal property to the extent the claim is attributable to the purchase of such property by the debtor for that portion of the obligation that becomes due after the order for relief, reducing the payments under sub- paragraph (A) by the amount so paid and pro- viding the trustee with evidence of such pay- ment, including the amount and date of pay- ment. (2) A payment made under paragraph (1)(A) shall be retained by the trustee until confirma- tion or denial of confirmation. If a plan is con- firmed, the trustee shall distribute any such payment in accordance with the plan as soon as is practicable. If a plan is not confirmed, the trustee shall return any such payments not pre- viously paid and not yet due and owing to credi- tors pursuant to paragraph (3) to the debtor, after deducting any unpaid claim allowed under section 503(b). (3) Subject to section 363, the court may, upon notice and a hearing, modify, increase, or reduce the payments required under this subsection pending confirmation of a plan. (4) Not later than 60 days after the date of fil- ing of a case under this chapter, a debtor retain- Page 320 TITLE 11—BANKRUPTCY § 1326 1 See Adjustment of Dollar Amounts notes below. ing possession of personal property subject to a lease or securing a claim attributable in whole or in part to the purchase price of such property shall provide the lessor or secured creditor rea- sonable evidence of the maintenance of any re- quired insurance coverage with respect to the use or ownership of such property and continue to do so for so long as the debtor retains posses- sion of such property. (b) Before or at the time of each payment to creditors under the plan, there shall be paid— (1) any unpaid claim of the kind specified in section 507(a)(2) of this title; (2) if a standing trustee appointed under sec- tion 586(b) of title 28 is serving in the case, the percentage fee fixed for such standing trustee under section 586(e)(1)(B) of title 28; and (3) if a chapter 7 trustee has been allowed compensation due to the conversion or dis- missal of the debtor’s prior case pursuant to section 707(b), and some portion of that com- pensation remains unpaid in a case converted to this chapter or in the case dismissed under section 707(b) and refiled under this chapter, the amount of any such unpaid compensation, which shall be paid monthly— (A) by prorating such amount over the re- maining duration of the plan; and (B) by monthly payments not to exceed the greater of— (i) $25; 1 or (ii) the amount payable to unsecured nonpriority creditors, as provided by the plan, multiplied by 5 percent, and the re- sult divided by the number of months in the plan. (c) Except as otherwise provided in the plan or in the order confirming the plan, the trustee shall make payments to creditors under the plan. (d) Notwithstanding any other provision of this title— (1) compensation referred to in subsection (b)(3) is payable and may be collected by the trustee under that paragraph, even if such amount has been discharged in a prior case under this title; and (2) such compensation is payable in a case under this chapter only to the extent per- mitted by subsection (b)(3). (Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2650; Pub. L. 98–353, title III, §§ 318(a), 531, July 10, 1984, 98 Stat. 357, 389; Pub. L. 99–554, title II, §§ 230, 283(z), Oct. 27, 1986, 100 Stat. 3103, 3118; Pub. L. 103–394, title III, § 307, Oct. 22, 1994, 108 Stat. 4135; Pub. L. 109–8, title III, § 309(c)(2), title XII, § 1224, title XV, § 1502(a)(10), Apr. 20, 2005, 119 Stat. 83, 199, 217.) HISTORICAL AND REVISION NOTES LEGISLATIVE STATEMENTS Section 1326(a)(2) of the House amendment adopts a comparable provision contained in the House bill pro- viding for standing trustees. SENATE REPORT NO. 95–989 Section 1326 supplements the priorities provisions of section 507. Subsection (a) requires accrued costs of ad- ministration and filing fees, as well as fees due the chapter 13 trustee, to be disbursed before payments to creditors under the plan. Subsection (b) makes it clear that the chapter 13 trustee is normally to make dis- tribution to creditors of the payments made under the plan by the debtor. HOUSE REPORT NO. 95–595 Subsection (a) requires that before or at the time of each payment any outstanding administrative expenses [and] any percentage fee due for a private standing chapter 13 trustee be paid in full. Editorial Notes AMENDMENTS 2005—Subsec. (a). Pub. L. 109–8, § 309(c)(2), amended subsec. (a) generally. Prior to amendment subsec. (a) read as follows: ‘‘(a)(1) Unless the court orders otherwise, the debtor shall commence making the payments proposed by a plan within 30 days after the plan is filed. ‘‘(2) A payment made under this subsection shall be retained by the trustee until confirmation or denial of confirmation of a plan. If a plan is confirmed, the trust- ee shall distribute any such payment in accordance with the plan as soon as practicable. If a plan is not confirmed, the trustee shall return any such payment to the debtor, after deducting any unpaid claim allowed under section 503(b) of this title.’’ Subsec. (b)(1). Pub. L. 109–8, § 1502(a)(10), substituted ‘‘507(a)(2)’’ for ‘‘507(a)(1)’’. Subsec. (b)(3). Pub. L. 109–8, § 1224(1), added par. (3). Subsec. (d). Pub. L. 109–8, § 1224(2), added subsec. (d). 1994—Subsec. (a)(2). Pub. L. 103–394 inserted ‘‘as soon as practicable’’ before period at end of second sentence. 1986—Subsec. (a)(2). Pub. L. 99–554, § 283(z), substituted ‘‘payment’’ for ‘‘payments’’ in last sentence. Subsec. (b). Pub. L. 99–554, § 230, amended subsec. (b) generally, substituting ‘‘586(b) of title 28’’ for ‘‘1302(d) of this title’’ and ‘‘586(e)(1)(B) of title 28’’ for ‘‘1302(e) of this title’’ in par. (2). 1984—Subsec. (a). Pub. L. 98–353, § 318(a)(2), added sub- sec. (a). Former subsec. (a) redesignated (b). Subsec. (b). Pub. L. 98–353, § 318(a)(1), redesignated subsec. (a) as (b). Former subsec. (b) redesignated (c). Subsec. (b)(2). Pub. L. 98–353, § 531, inserted ‘‘of this title’’ after ‘‘1302(d)’’. Subsec. (c). Pub. L. 98–353, § 318(a)(1), redesignated former subsec. (b) as (c). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2005 AMENDMENT Amendment by Pub. L. 109–8 effective 180 days after Apr. 20, 2005, and not applicable with respect to cases commenced under this title before such effective date, except as otherwise provided, see section 1501 of Pub. L. 109–8, set out as a note under section 101 of this title. EFFECTIVE DATE OF 1994 AMENDMENT Amendment by Pub. L. 103–394 effective Oct. 22, 1994, and not applicable with respect to cases commenced under this title before Oct. 22, 1994, see section 702 of Pub. L. 103–394, set out as a note under section 101 of this title. EFFECTIVE DATE OF 1986 AMENDMENT Effective date and applicability of amendment by sec- tion 230 of Pub. L. 99–554 dependent upon the judicial district involved, see section 302(d), (e) of Pub. L. 99–554, set out as a note under section 581 of Title 28, Judiciary and Judicial Procedure. Amendment by section 283 of Pub. L. 99–554 effective 30 days after Oct. 27, 1986, see section 302(a) of Pub. L. 99–554. EFFECTIVE DATE OF 1984 AMENDMENT Amendment by Pub. L. 98–353 effective with respect to cases filed 90 days after July 10, 1984, see section Page 321 TITLE 11—BANKRUPTCY § 1328 552(a) of Pub. L. 98–353, set out as a note under section 101 of this title. Court Rules and Judicial Documents ADJUSTMENT OF DOLLAR AMOUNTS The dollar amounts specified in this section were ad- justed by notices of the Judicial Conference of the United States pursuant to section 104 of this title as follows: By notice dated Jan. 31, 2022, 87 F.R. 6625, effective Apr. 1, 2022, in subsec. (b)(3), dollar amount ‘‘25’’ was adjusted to ‘‘25’’. See notice of the Judicial Conference of the United States set out as a note under section 104 of this title. By notice dated Feb. 5, 2019, 84 F.R. 3488, effective Apr. 1, 2019, in subsec. (b)(3), dollar amount ‘‘25’’ was adjusted to ‘‘25’’. By notice dated Feb. 16, 2016, 81 F.R. 8748, effective Apr. 1, 2016, in subsec. (b)(3), dollar amount ‘‘25’’ was adjusted to ‘‘25’’. By notice dated Feb. 12, 2013, 78 F.R. 12089, effective Apr. 1, 2013, in subsec. (b)(3), dollar amount ‘‘25’’ was adjusted to ‘‘25’’. By notice dated Feb. 19, 2010, 75 F.R. 8747, effective Apr. 1, 2010, in subsec. (b)(3)(B), dollar amount ‘‘25’’ was adjusted to ‘‘25’’. By notice dated Feb. 7, 2007, 72 F.R. 7082, effective Apr. 1, 2007, in subsec. (b)(3), dollar amount ‘‘25’’ was adjusted to ‘‘25’’. § 1327. Effect of confirmation (a) The provisions of a confirmed plan bind the debtor and each creditor, whether or not the claim of such creditor is provided for by the plan, and whether or not such creditor has ob- jected to, has accepted, or has rejected the plan. (b) Except as otherwise provided in the plan or the order confirming the plan, the confirmation of a plan vests all of the property of the estate in the debtor. (c) Except as otherwise provided in the plan or in the order confirming the plan, the property vesting in the debtor under subsection (b) of this section is free and clear of any claim or interest of any creditor provided for by the plan. (Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2650.) HISTORICAL AND REVISION NOTES SENATE REPORT NO. 95–989 Subsection (a) binds the debtor and each creditor to the provisions of a confirmed plan, whether or not the claim of the creditor is provided for by the plan and whether or not the creditor has accepted, rejected, or objected to the plan. Unless the plan itself or the order confirming the plan otherwise provides, confirmation is deemed to vest all property of the estate in the debtor, free and clear of any claim or interest of any creditor provided for by the plan. § 1328. Discharge (a) Subject to subsection (d), as soon as prac- ticable after completion by the debtor of all payments under the plan, and in the case of a debtor who is required by a judicial or adminis- trative order, or by statute, to pay a domestic support obligation, after such debtor certifies that all amounts payable under such order or such statute that are due on or before the date of the certification (including amounts due be- fore the petition was filed, but only to the ex- tent provided for by the plan) have been paid, unless the court approves a written waiver of discharge executed by the debtor after the order for relief under this chapter, the court shall grant the debtor a discharge of all debts pro- vided for by the plan or disallowed under section 502 of this title, except any debt— (1) provided for under section 1322(b)(5); (2) of the kind specified in section 507(a)(8)(C) or in paragraph (1)(B), (1)(C), (2), (3), (4), (5), (8), or (9) of section 523(a); (3) for restitution, or a criminal fine, in- cluded in a sentence on the debtor’s conviction of a crime; or (4) for restitution, or damages, awarded in a civil action against the debtor as a result of willful or malicious injury by the debtor that caused personal injury to an individual or the death of an individual. (b) Subject to subsection (d), at any time after the confirmation of the plan and after notice and a hearing, the court may grant a discharge to a debtor that has not completed payments under the plan only if— (1) the debtor’s failure to complete such pay- ments is due to circumstances for which the debtor should not justly be held accountable; (2) the value, as of the effective date of the plan, of property actually distributed under the plan on account of each allowed unsecured claim is not less than the amount that would have been paid on such claim if the estate of the debtor had been liquidated under chapter 7 of this title on such date; and (3) modification of the plan under section 1329 of this title is not practicable. (c) A discharge granted under subsection (b) of this section discharges the debtor from all unse- cured debts provided for by the plan or dis- allowed under section 502 of this title, except any debt— (1) provided for under section 1322(b)(5) of this title; or (2) of a kind specified in section 523(a) of this title. (d) Notwithstanding any other provision of this section, a discharge granted under this sec- tion does not discharge the debtor from any debt based on an allowed claim filed under section 1305(a)(2) of this title if prior approval by the trustee of the debtor’s incurring such debt was practicable and was not obtained. (e) On request of a party in interest before one year after a discharge under this section is granted, and after notice and a hearing, the court may revoke such discharge only if— (1) such discharge was obtained by the debt- or through fraud; and (2) the requesting party did not know of such fraud until after such discharge was granted. (f) Notwithstanding subsections (a) and (b), the court shall not grant a discharge of all debts provided for in the plan or disallowed under sec- tion 502, if the debtor has received a discharge— (1) in a case filed under chapter 7, 11, or 12 of this title during the 4-year period preceding the date of the order for relief under this chap- ter, or (2) in a case filed under chapter 13 of this title during the 2-year period preceding the date of such order.