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What is the main question in the Best Efforts test for Chapter 13 plan?
What is the main question in the Best Efforts test for Chapter 13 plan?
- Whether the debtor is following the model plan over 3-5 years
- Whether the debtor is able to keep all of their assets
- Whether the debtor is making a hypothetical ch 7 liquidation plan
- Whether the debtor is making the best efforts to pay the creditors (correct)
What is required to be paid in full during the life of the Chapter 13 plan?
What is required to be paid in full during the life of the Chapter 13 plan?
- All priority creditors (correct)
- All unsecured creditors
- All non-priority creditors
- All secured creditors
What is the restriction for debtors above median income in the Best Efforts test?
What is the restriction for debtors above median income in the Best Efforts test?
- Allowed to deduct all their expenses
- Restricted to the IRS expense exemptions (correct)
- Restricted to use their actual expenses
- Allowed to use any expense exemptions
What can be lien stripped in a Chapter 13 plan according to Section 1322(a)?
What can be lien stripped in a Chapter 13 plan according to Section 1322(a)?
What is a key difference between Chapter 7 and Chapter 13 bankruptcy?
What is a key difference between Chapter 7 and Chapter 13 bankruptcy?
Under which chapter of bankruptcy can intentional torts be discharged?
Under which chapter of bankruptcy can intentional torts be discharged?
What is a reason for selecting a Chapter 13 plan over a Chapter 7 plan?
What is a reason for selecting a Chapter 13 plan over a Chapter 7 plan?
What are the arguments against the discharge of debts under Chapter 13?
What are the arguments against the discharge of debts under Chapter 13?
What does § 1325(b)(2) allow above-median debtors to exclude from disposable income?
What does § 1325(b)(2) allow above-median debtors to exclude from disposable income?
In the context of § 1325(b)(2), why are child support payments categorically excluded from the calculation of disposable income for above-median debtors?
In the context of § 1325(b)(2), why are child support payments categorically excluded from the calculation of disposable income for above-median debtors?
What is the outcome for an above-median debtor regarding the exclusion of child support payments from disposable income under § 1325(b)(2)?
What is the outcome for an above-median debtor regarding the exclusion of child support payments from disposable income under § 1325(b)(2)?
In Chapter 13 bankruptcy, what is the requirement for the debtor's 'projected disposable income'?
In Chapter 13 bankruptcy, what is the requirement for the debtor's 'projected disposable income'?
What does the Best Interests Test protect creditors against in Chapter 13 bankruptcy?
What does the Best Interests Test protect creditors against in Chapter 13 bankruptcy?
When does the Disposable Income test protect creditors in Chapter 13 bankruptcy?
When does the Disposable Income test protect creditors in Chapter 13 bankruptcy?
What happens when there is a conflict between two statutory sections in Chapter 13 bankruptcy?
What happens when there is a conflict between two statutory sections in Chapter 13 bankruptcy?
What is the requirement for the debtor's commitment of income in a Chapter 13 bankruptcy payment plan?
What is the requirement for the debtor's commitment of income in a Chapter 13 bankruptcy payment plan?
What must the debtor propose if the Ch. 13 trustee or a creditor objects to the payment plan?
What must the debtor propose if the Ch. 13 trustee or a creditor objects to the payment plan?
What does 'best effort' mean in the context of Chapter 13 bankruptcy?
What does 'best effort' mean in the context of Chapter 13 bankruptcy?
What does the court consider when determining necessary expenses in Chapter 13 bankruptcy?
What does the court consider when determining necessary expenses in Chapter 13 bankruptcy?
What is critical in determining budget allowances in Chapter 13 bankruptcy?
What is critical in determining budget allowances in Chapter 13 bankruptcy?
What does the means test calculate disposable income by deducting in Chapter 13 bankruptcy?
What does the means test calculate disposable income by deducting in Chapter 13 bankruptcy?
What expenses are considered in the means test for above-median income debtors in Chapter 13 bankruptcy?
What expenses are considered in the means test for above-median income debtors in Chapter 13 bankruptcy?
What can above-median debtors claim in the means test for expenses in Chapter 13 bankruptcy?
What can above-median debtors claim in the means test for expenses in Chapter 13 bankruptcy?
When can secured debt payments not be deducted in the Chapter 13 plan?
When can secured debt payments not be deducted in the Chapter 13 plan?
What is necessary for a debt to be included in the Chapter 13 plan?
What is necessary for a debt to be included in the Chapter 13 plan?
In a specific case, what is the monthly income of a single mother with two minor children, making her an above-median debtor?
In a specific case, what is the monthly income of a single mother with two minor children, making her an above-median debtor?
Why are the details of the means test and expense deductions critical in Chapter 13 bankruptcy?
Why are the details of the means test and expense deductions critical in Chapter 13 bankruptcy?
What is the rationale for creating a separate class for particular unsecured debts in a Chapter 13 bankruptcy plan?
What is the rationale for creating a separate class for particular unsecured debts in a Chapter 13 bankruptcy plan?
In Chapter 13 bankruptcy, what type of creditors get their own classification for the money they’re owed?
In Chapter 13 bankruptcy, what type of creditors get their own classification for the money they’re owed?
What is the legal standard for classifying creditors in a Chapter 13 bankruptcy plan?
What is the legal standard for classifying creditors in a Chapter 13 bankruptcy plan?
In the case of In Re Crawford, what were the total unsecured debts owed by the Chapter 13 debtor?
In the case of In Re Crawford, what were the total unsecured debts owed by the Chapter 13 debtor?
Which of the following is a requirement for a debtor to be able to lien strip a personal property loan in Chapter 13 bankruptcy?
Which of the following is a requirement for a debtor to be able to lien strip a personal property loan in Chapter 13 bankruptcy?
What is the consequence for a debtor who wishes to retain a vehicle financed within roughly 2 1/2 years prior to bankruptcy under the hanging paragraph provision?
What is the consequence for a debtor who wishes to retain a vehicle financed within roughly 2 1/2 years prior to bankruptcy under the hanging paragraph provision?
What is the majority view regarding the surrender of a car by a debtor in Chapter 13 bankruptcy when Section 506 does not apply?
What is the majority view regarding the surrender of a car by a debtor in Chapter 13 bankruptcy when Section 506 does not apply?
Under what circumstances can a Chapter 13 debtor lien strip a personal property loan?
Under what circumstances can a Chapter 13 debtor lien strip a personal property loan?
What is the consequence for a debtor who has financed the purchase of a vehicle for personal use within roughly 2 1/2 years prior to bankruptcy and wishes to retain the collateral?
What is the consequence for a debtor who has financed the purchase of a vehicle for personal use within roughly 2 1/2 years prior to bankruptcy and wishes to retain the collateral?
What is the effect of the hanging paragraph provision on a debtor who has financed the purchase of a vehicle for personal use within roughly 2 1/2 years prior to bankruptcy?
What is the effect of the hanging paragraph provision on a debtor who has financed the purchase of a vehicle for personal use within roughly 2 1/2 years prior to bankruptcy?
What is the purpose of the hanging provision for personal property loans in Chapter 13 bankruptcy?
What is the purpose of the hanging provision for personal property loans in Chapter 13 bankruptcy?
Can a debtor lien strip a personal property loan if it is for business use?
Can a debtor lien strip a personal property loan if it is for business use?
In Chapter 13 bankruptcy, what is the allowed ratio for unsecured creditors' payment as per the trustee?
In Chapter 13 bankruptcy, what is the allowed ratio for unsecured creditors' payment as per the trustee?
What is the basis for calculating interest in Chapter 13 when cramming down, according to the Till Rate?
What is the basis for calculating interest in Chapter 13 when cramming down, according to the Till Rate?
What is the duration of the right to cure delinquent mortgages in Chapter 13?
What is the duration of the right to cure delinquent mortgages in Chapter 13?
What are the choices for balloon payments in Chapter 13?
What are the choices for balloon payments in Chapter 13?
What is allowed in lien stripping in Chapter 13?
What is allowed in lien stripping in Chapter 13?
What is the requirement for accommodating secured creditors in the debtor’s proposed debt adjustment plan in Chapter 13?
What is the requirement for accommodating secured creditors in the debtor’s proposed debt adjustment plan in Chapter 13?
What is the key restriction regarding home mortgage loans in Chapter 13 under 1322(b)?
What is the key restriction regarding home mortgage loans in Chapter 13 under 1322(b)?
What does §1322(b)(1) allow in Chapter 13 bankruptcy?
What does §1322(b)(1) allow in Chapter 13 bankruptcy?
What is required for equitable treatment in Chapter 13 bankruptcy?
What is required for equitable treatment in Chapter 13 bankruptcy?
What is the outcome of the Harding case regarding fees and penalties during bankruptcy?
What is the outcome of the Harding case regarding fees and penalties during bankruptcy?
What is the basis for calculating interest in Chapter 13 when cramming down, according to the Till Rate?
What is the basis for calculating interest in Chapter 13 when cramming down, according to the Till Rate?
What is the basis for calculating interest in Chapter 13 when cramming down, according to the Till Rate?
What is the basis for calculating interest in Chapter 13 when cramming down, according to the Till Rate?
What is required for a plan modification in Chapter 13 bankruptcy?
What is required for a plan modification in Chapter 13 bankruptcy?
What is a key requirement for debtors to report to the court in Chapter 13 bankruptcy?
What is a key requirement for debtors to report to the court in Chapter 13 bankruptcy?
What is the effect of the 'super discharge' in Chapter 13 bankruptcy?
What is the effect of the 'super discharge' in Chapter 13 bankruptcy?
What is considered 'not good faith' in Chapter 13 bankruptcy?
What is considered 'not good faith' in Chapter 13 bankruptcy?
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Study Notes
Chapter 13 Bankruptcy and Best Efforts Test
- In Chapter 13 bankruptcy, the debtor is required to commit all "projected disposable income" to a payment plan unless paying creditors in full.
- If the Ch. 13 trustee or a creditor objects to the payment plan, it must propose payments that pay unsecured claims in full or apply all projected disposable income to payments for the full commitment period.
- "Best effort" means presenting an honest budget to the court.
- The court determines necessary expenses based on the debtor's income level and may account for changes in income or expenses at the time of confirmation.
- The debtor's income level is critical in determining budget allowances.
- The means test calculates disposable income by deducting living expenses, secured debt payments, priority debts, and administrative expenses.
- The reasonable vehicle and college expenses are considered in the means test for above-median income debtors.
- Above-median debtors can claim the full IRS standard amount for expenses, even if their actual expenses are less.
- Secured debt payments cannot be deducted if the collateral is to be surrendered in the Chapter 13 plan.
- The debtor must be legally obligated to pay a debt for it to be included in the Chapter 13 plan.
- In a specific case, a single mother with two minor children is an above-median debtor with a monthly income of $6614.50, including child support.
- The details of the means test and expense deductions are critical in determining the debtor's obligations and allowances in Chapter 13 bankruptcy.
Bankruptcy Law Chapter 13 Key Points
- Debtor proposed a plan to divide the debt into two classes: (1) for the debt to the county and (2) for other debts
- The proposed plan aimed to pay 2/3 of child support payments and nothing to the rest of unsecured creditors
- §1322(b)(1) allows classification of unsecured claims as long as it does not unfairly discriminate against a class of creditors
- Equitable treatment for both unsecured creditors and the debtor is required, offering zero payment to unsecured creditors is not allowed
- Trustee's permitted ratio for unsecured creditors' payment should be asked
- The Harding case states that fees and penalties cannot accrue during bankruptcy due to the automatic stay
- The debtor’s proposed debt adjustment plan must accommodate secured creditors in one of three ways: Accept the plan, Surrender the property securing the debt, or modify the claim
- The Till Rate is used to calculate interest in Chapter 13 when cramming down, based on the prime rate
- Home Mortgage Loans cannot be crammed down in Chapter 13 under 1322(b)
- Delinquent mortgages can be cured in Chapter 13, and the right to cure lasts the life of the plan
- Choices for balloon payments in Chapter 13 include making equal payments over five years or making 59 payments then another balloon
- In Chapter 13, lien stripping is allowed for wholly unsecured loans but not for partially secured ones
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