California Bankruptcy Lawyer in San Diego and Del Mar

Chapter 13 Plan

Filing a Plan: Only the bankruptcy debtor may file a Chapter 13 plan, and it must be filed with the petition or within fifteen days thereafter, unless the court grants an extension for cause. Bankruptcy Code §1321; Bankruptcy Rule 3015(b).

Mandatory Provisions

A Chapter 13 plan must include the following provisions; Bankruptcy Code §1322(a):

a. Sufficient income to be turned over to trustee: The plan must provide that such amount of the debtor's future earnings or other future income as is required for the implementation of the plan will be turned over to the Chapter 13 trustee. Bankruptcy Code 1322(a)(1).

b. Full payment of priority claims: The plan must provide that all priority claims will be paid fully in deferred cash payments, unless a particular creditor consents to different treatment. Bankruptcy Code §1322(a)(2).
(1) Note: While priority claimants in a Chapter 13 case are entitled to receive payments totaling the full amount of their claims, the payments need not equal the present value of their claims.

c. Same treatment for claims of a class: If the plan designates classes of claims, it must provide identical treatment for all claims within any one class. Bankruptcy Code §1322(a)(3)J.

Permissive Provisions

A Chapter 13 plan may include any of the following provisions Bankruptcy Code §1322(b):

a. Classification of claims: The plan may specify various classes of unsecured claims in accordance with Bankruptcy Code section 1322 , provided that it does not discriminate unfairly against any particular class. However, the Code expressly permits a Chapter 13 plan to provide different treatment for a consumer debt on which an individual co-debtor is also liable than for other unsecured claims. Bankruptcy Code §1322(b)(1);

(1) "Unfair discrimination": Some courts apply the following criteria in determining whether discrimination against a class is fair: (i) Whether there is a reasonable basis for the discriminatory treatment; (ii) Whether the plan could be implemented without the discrimination; (iii) The presence or absence of good faith and (iv) The manner in which the class is treated under the plan.
(a) Example: The bankruptcy Debtor files a Chapter 13 petition and a plan designating two classes of unsecured claims, Class I consists of debts incurred in a business that Debtor has closed, and Class 2 consists of consumer debts. Debtor's plan proposes to pay nothing to the claimants in Class I, and to pay 100 percent to the claimants in Class 2. The plan is unfairly discriminatory under the four criteria above, and thus the court denies confirmation.
(b) Compare: The bankruptcy Debtor files a Chapter 13 petition accompanied by a plan proposing the following: Class 1— all priority claims, to be paid in full; Class II-—child support claims, to be paid in full; Class III—unsecured claims of $100 or less, lo be paid in full; and Class 1V-—all other unsecured claims, to be paid eighteen percent. The trustee objects to confirmation of the plan because of the difference in treatment between Classes II and IV. However, "in light of the overwhelming public policy in favor of providing support for children" and the virtual impossibility of a successful Chapter 13 plan not providing full payment of child support, the bankruptcy Debtor's plan is not unfairly discriminatory and therefore is confirmed by the court.

As described above, a chapter 13 case provides for the reorganization of debts, rather than for the liquidation of debts against the bankruptcy debtors assets. There are no similar provisions in a chapter 7 bankruptcy liquidation. Once the debtor completes the plan as confirmed, any balances owed creditors that would be due under state law are discharged by the standard chapter 13 discharge.

Del Mar, California

Del Mar is a city in San Diego County, California, United States. The population was 4,389 at the 2000 census. The San Diego County Fair is hosted on the Del Mar Fairgrounds every summer. Del Mar is Spanish for "of the sea" or "by the sea", because it is located near the Pacific Ocean. Colonel Jacob Taylor purchased 338 acres from Enoch Talbert in 1885, with visions of building a seaside resort for the rich and famous Encinitas is a coastal city in northern San Diego County, California. As of the 2000 census, the city had a total population of 58,014. It is located about 40 km (25 mi) north of San Diego, and about 150 km (95 mi) south of Los Angeles.

The Pacific Bankruptcy Center assists the residents of Del Mar, California in filing for relief under the United States bankruptcy code. We are a debt relief agency