![]() In addition, the court must find the plan is proposed “in good faith” and it is anticipated that “the debtor will be able to make all payments under the plan and to comply with the plan.” 11 U.S.C. Likewise, under § 1329, a court “may not” approve a proposed plan modification that provides payments to be due more than five years after the first payment under the original plan was due. Specifically, § 1322 instructs that a court “may not” approve a proposed plan if it schedules payments over a period of more than five years. On appeal, the Court addressed several arguments raised by the creditor, including that the plain language of the statute bars any payment after the plan term. ![]() ![]() The creditor also filed an adversary proceeding objecting to discharge, which the bankruptcy court eventually decided in favor of the Debtors. However, another creditor had by then joined in the Trustee’s motion and pressed forward arguing that the failure of the Debtors to completely fund the Plan within sixty months was a material default, constituting cause for dismissal under 11 U.S.C. However, sixty-one months after the start of the Plan, the Trustee filed a motion to dismiss because there were arrears under the Plan of $1,123, which the Debtors paid within sixteen days. Over the five years of the Plan, the Debtors remitted $174,104 to the Trustee as plan payments. The case involved a situation where the Debtors proposed and confirmed a 60-month plan. In a case of first impression in the Circuit, the Court in In re Klaas held that a bankruptcy court has discretion to allow a “grace period” for a late curative payment and issue a completion discharge in favor of the debtor. Chapter 13 plan payments must be completed within 5 years.īut wait – the Third Circuit Court of Appeals recently held that a Chapter 13 Debtor can receive a discharge, even if the final plan payment is made after 60 months.
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