CBS Chapter 13 Repayment Plans 2

Question 1

Under Chapter 13, what is the maximum length of a repayment plan for a debtor whose current monthly income exceeds the applicable state median?

Accepted Answer

5 years

Answer

When a debtor's current monthly income exceeds the applicable state median, the plan must be at least 5 years (60 months) and cannot exceed 5 years.

Question 2

Which party has the right to object to confirmation of a Chapter 13 plan?

Accepted Answer

Any party in interest, including the trustee and creditors

Answer

Under 11 U.S.C. § 1324, any party in interest—including the trustee, any creditor, and the U.S. Trustee—may object to confirmation of a Chapter 13 plan.

Question 3

What happens to a Chapter 13 plan payment if the debtor receives a substantial windfall (e.g., an inheritance) during the plan period?

Accepted Answer

The trustee may seek plan modification to increase payments to unsecured creditors

Answer

Under 11 U.S.C. § 1329, a trustee or unsecured creditor may move to modify the plan to apply the windfall, increasing distributions to unsecured creditors.

Question 4

Under the 'hanging paragraph' of 11 U.S.C. § 1325(a), what special protection is given to certain secured creditors?

Accepted Answer

They are barred from bifurcating their claim into secured and unsecured portions for debts incurred within specific timeframes

Answer

The hanging paragraph prevents cramdown (bifurcation) of purchase-money security interests for motor vehicles acquired within 910 days before filing or other personal property within 1 year before filing.

Question 5

A debtor proposes to pay a long-term mortgage through the Chapter 13 plan over 60 months. The mortgage has 20 years remaining. How is this treated?

Accepted Answer

The debtor may cure arrears and maintain regular post-petition payments, with the mortgage surviving the plan

Answer

Under 11 U.S.C. § 1322(b)(5), a debtor may cure pre-petition defaults and maintain current payments on long-term debts that extend beyond the plan period.

(CBS) Certified Bankruptcy Specialist Practice Test

(CBS) Certified Bankruptcy Specialist Practice Test

CBS Chapter 13 Repayment Plans 2