United States Code

11 U.S.C. § 1325 — Confirmation of plan

Section 1325 lists what a Chapter 13 repayment plan must satisfy before a bankruptcy court may confirm it. Subsection (a) sets out nine requirements, including good faith, feasibility, and paying unsecured creditors at least what a chapter 7 liquidation would. Subsection (b) adds a disposable income test that applies when the trustee or an unsecured creditor objects. Subsection (c) lets the court order income paid directly to the trustee.

Confirmation is the moment a Chapter 13 case stops being a proposal and becomes a court-approved repayment plan. Section 1325 is the checklist the judge works through to get there, and it is where most objections to a plan are fought. Reading it shows what a trustee or a creditor can push back on before a plan is approved.

What does the court check before confirming a Chapter 13 plan?

Subsection (a) says the court shall confirm a plan if a list of requirements is met. The plan has to comply with chapter 13 and the other applicable provisions of the Bankruptcy Code, and any fee or charge due before confirmation must already be paid. Paragraph (3) requires that the plan be proposed in good faith and not by means forbidden by law, and paragraph (7) separately requires that the filing of the petition itself was in good faith. Paragraph (6) asks whether the debtor will actually be able to make all payments under the plan and comply with it — feasibility. Paragraph (8) requires that domestic support obligations first becoming payable after the petition date have been paid. Paragraph (9) requires that all applicable federal, state, and local tax returns required by section 1308 have been filed. Subsection (c) adds a separate power: after confirmation, the court may order an entity that pays the debtor income to send all or part of that income to the trustee.

What is the best interests of creditors test?

Paragraph (a)(4) is often called the best interests of creditors test. It compares two numbers as of the effective date of the plan: the value of the property to be distributed under the plan on account of each allowed unsecured claim, and the amount that claim would be paid if the estate were liquidated under chapter 7 on that same date. The plan figure cannot be less than the chapter 7 figure. The practical effect is that a chapter 13 plan is measured against the chapter 7 alternative rather than against the full amount owed. Property that would be sold and distributed in a liquidation drives the comparison, so the more value the estate holds for creditors, the more the plan generally has to pay to satisfy this paragraph. The comparison is made claim by claim. This paragraph is separate from the disposable income test in subsection (b); a plan can be required to satisfy both.

How does the plan have to treat my car loan or other secured debt?

Paragraph (a)(5) gives three routes for each allowed secured claim. Under subparagraph (A), the holder of the claim accepts the plan. Under subparagraph (C), the debtor surrenders the collateral to the holder. Subparagraph (B) is the route used when the debtor keeps the property: the plan must let the creditor retain its lien until the underlying debt is paid under nonbankruptcy law or a discharge is entered under section 1328, whichever comes first, and the lien is also retained if the case is dismissed or converted before the plan is completed. The value distributed on account of the claim cannot be less than the allowed amount of the claim. If payments are periodic they must be in equal monthly amounts, and where the collateral is personal property the payments must be enough to give the creditor adequate protection during the plan. A separate paragraph after (a)(5) matters for vehicles. Section 506 does not apply where the creditor holds a purchase money security interest, the debt was incurred within the 910-day period before the petition, and the collateral is a motor vehicle acquired for the debtor's personal use — or, for other collateral, where the debt was incurred within one year before filing.

What is the disposable income test if the trustee objects?

Subsection (b) applies only if the trustee or a holder of an allowed unsecured claim objects to confirmation. If nobody objects, this test is not triggered. When there is an objection, the court may not approve the plan unless one of two things is true as of the effective date: the plan pays that claim in full, or the plan provides that all of the debtor's projected disposable income received in the applicable commitment period will be applied to payments to unsecured creditors. Paragraph (2) defines disposable income as current monthly income less amounts reasonably necessary for maintenance or support of the debtor and dependents, for a domestic support obligation first becoming payable after filing, for qualifying charitable contributions up to the share of gross income stated in that paragraph, and, for a debtor engaged in business, expenditures necessary to keep the business operating. Certain child support, foster care, and disability payments for a dependent child are excluded from income to the extent reasonably necessary to be spent for that child. Paragraph (3) directs that for a debtor whose annualized current monthly income exceeds the applicable state median described there, those expense amounts are determined under section 707(b)(2).

How long does a Chapter 13 plan have to run?

Paragraph (b)(4) defines the applicable commitment period, which is the window over which projected disposable income must be applied under (b)(1)(B). The default is three years. It is not less than five years if the current monthly income of the debtor and the debtor's spouse combined, multiplied by twelve, is not less than the applicable state median family income described in subparagraph (A)(ii). For a household of one, the comparison uses the state median for one earner; for households of two, three, or four, it uses the highest median for a family of that number or fewer; for households above four, the statute adds a set monthly amount for each additional person, stated in the text below. Subparagraph (B) allows a period shorter than three or five years, but only if the plan provides for payment in full of all allowed unsecured claims over that shorter time. These are the same median figures used in paragraph (3).

This summary is our plain-English explanation, written to help you find the right part of the text below. The section itself is the authority — where the two differ, the text controls.

Text of 11 U.S.C. § 1325

Reproduced in full from the official source, verified as of July 2026. View it at the source.

(a) Except as provided in subsection (b), the court shall confirm a plan if—

(1) The plan complies with the provisions of this chapter and with the other applicable provisions of this title;

(2) any fee, charge, or amount required under chapter 123 of title 28, or by the plan, to be paid before confirmation, has been paid;

(3) the plan has been proposed in good faith and not by any means forbidden by law;

(4) the value, as of the effective date of the plan, of property to be distributed under the plan on account of each allowed unsecured claim is not less than the amount that would be paid on such claim if the estate of the debtor were liquidated under chapter 7 of this title on such date;

(5) with respect to each allowed secured claim provided for by the plan—

(A) the holder of such claim has accepted the plan;

(B)(i) the plan provides that—

(I) the holder of such claim retain the lien securing such claim until the earlier of—

(aa) the payment of the underlying debt determined under nonbankruptcy law; or

(bb) discharge under section 1328; and

(II) if the case under this chapter is dismissed or converted without completion of the plan, such lien shall also be retained by such holder to the extent recognized by applicable nonbankruptcy law;

(ii) the value, as of the effective date of the plan, of property to be distributed under the plan on account of such claim is not less than the allowed amount of such claim; and

(iii) if—

(I) property to be distributed pursuant to this subsection is in the form of periodic payments, such payments shall be in equal monthly amounts; and

(II) the holder of the claim is secured by personal property, the amount of such payments shall not be less than an amount sufficient to provide to the holder of such claim adequate protection during the period of the plan; or

(6) the debtor will be able to make all payments under the plan and to comply with the plan;

(7) the action of the debtor in filing the petition was in good faith;

(8) the debtor has paid all amounts that are required to be paid under a domestic support obligation and that first become payable after the date of the filing of the petition if the debtor is required by a judicial or administrative order, or by statute, to pay such domestic support obligation; and

(9) the debtor has filed all applicable Federal, State, and local tax returns as required by section 1308.

For purposes of paragraph (5), section 506 shall not apply to a claim described in that paragraph if the creditor has a purchase money security interest securing the debt that is the subject of the claim, the debt was incurred within the 910-day period preceding the date of the filing of the petition, and the collateral for that debt consists of a motor vehicle (as defined in section 30102 of title 49) acquired for the personal use of the debtor, or if collateral for that debt consists of any other thing of value, if the debt was incurred during the 1-year period preceding that filing.

(b)(1) If the trustee or the holder of an allowed unsecured claim objects to the confirmation of the plan, then the court may not approve the plan unless, as of the effective date of the plan—

(A) the value of the property to be distributed under the plan on account of such claim is not less than the amount of such claim; or

(B) the plan provides that all of the debtor's projected disposable income to be received in the applicable commitment period beginning on the date that the first payment is due under the plan will be applied to make payments to unsecured creditors under the plan.

(2) For purposes of this subsection, the term "disposable income" means current monthly income received by the debtor (other than child support payments, foster care payments, or disability payments for a dependent child made in accordance with applicable nonbankruptcy law to the extent reasonably necessary to be expended for such child) less amounts reasonably necessary to be expended—

(A)(i) for the maintenance or support of the debtor or a dependent of the debtor, or for a domestic support obligation, that first becomes payable after the date the petition is filed; and

(ii) for charitable contributions (that meet the definition of "charitable contribution" under section 548(d)(3)) to a qualified religious or charitable entity or organization (as defined in section 548(d)(4)) in an amount not to exceed 15 percent of 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 continuation, preservation, and operation of such business.

(3) Amounts reasonably necessary to be expended under paragraph (2), other than subparagraph (A)(ii) of paragraph (2), shall be determined in accordance with subparagraphs (A) and (B) of section 707(b)(2), if the debtor has current monthly income, when multiplied by 12, greater than—

(A) in the case of a debtor in a household of 1 person, the median family income of the applicable State for 1 earner;

(B) in the case of a debtor in a household of 2, 3, or 4 individuals, the highest median family income of the applicable State for a family of the same number or fewer individuals; or

(C) in the case of a debtor in a household exceeding 4 individuals, the highest median family income of the applicable State for a family of 4 or fewer individuals, plus $525 1 per month for each individual in excess of 4.

(4) For purposes of this subsection, the "applicable commitment period"—

(A) subject to subparagraph (B), shall be—

(i) 3 years; or

(ii) not less than 5 years, if the current monthly income of the debtor and the debtor's spouse combined, when multiplied by 12, is not less than—

(I) in the case of a debtor in a household of 1 person, the median family income of the applicable State for 1 earner;

(II) in the case of a debtor in a household of 2, 3, or 4 individuals, the highest median family income of the applicable State for a family of the same number or fewer individuals; or

(III) in the case of a debtor in a household exceeding 4 individuals, the highest median family income of the applicable State for a family of 4 or fewer individuals, plus $525 1 per month for each individual in excess of 4; and

(B) may be less than 3 or 5 years, whichever is applicable under subparagraph (A), but only if the plan provides for payment in full of all allowed unsecured claims over a shorter period.

(c) After confirmation of a plan, the court may order any entity from whom the debtor receives income to pay all or any part of such income to the trustee.

(Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2649; Pub. L. 98–353, title III, §§317, 530, July 10, 1984, 98 Stat. 356, 389; Pub. L. 99–554, title II, §283(y), Oct. 27, 1986, 100 Stat. 3118; Pub. L. 105–183, §4(a), June 19, 1998, 112 Stat. 518; Pub. L. 109–8, title I, §102(g), (h), title II, §213(10), title III, §§306(a), (b), 309(c)(1), 318(2), (3), title VII, §716(a), Apr. 20, 2005, 119 Stat. 33, 53, 80, 83, 93, 129; Pub. L. 109–439, §2, Dec. 20, 2006, 120 Stat. 3285; Pub. L. 111–327, §2(a)(44), Dec. 22, 2010, 124 Stat. 3562; Pub. L. 116–136, div. A, title I, §1113(b)(1)(B), (2)(A)(ii), Mar. 27, 2020, 134 Stat. 311, 312; Pub. L. 116–260, div. N, title III, §320(e), (f)(2)(A)(v), Dec. 27, 2020, 134 Stat. 2016, 2017.)

Notes and amendment history

Published by the official source alongside the section above. These notes record how the text has changed over time and the reasoning behind those changes. They are not the operative rule — the enacted text is the section itself.

Historical and Revision Notes

legislative statements

Section 1325(a)(5)(B) of the House amendment modifies the House bill and Senate amendment to significantly protect secured creditors in chapter 13. Unless the secured creditor accepts the plan, the plan must provide that the secured creditor retain the lien securing the creditor's allowed secured claim in addition to receiving value, as of the effective date of the plan of property to be distributed under the plan on account of the claim not less than the allowed amount of the claim. To this extent, a secured creditor in a case under chapter 13 is treated identically with a recourse creditor under section 1111(b)(1) of the House amendment except that the secured creditor in a case under chapter 13 may receive any property of a value as of the effective date of the plan equal to the allowed amount of the creditor's secured claim rather than being restricted to receiving deferred cash payments. Of course, the secured creditors' lien only secures the value of the collateral and to the extent property is distributed of a present value equal to the allowed amount of the creditor's secured claim the creditor's lien will have been satisfied in full. Thus the lien created under section 1325(a)(5)(B)(i) is effective only to secure deferred payments to the extent of the amount of the allowed secured claim. To the extent the deferred payments exceed the value of the allowed amount of the secured claim and the debtor subsequently defaults, the lien will not secure unaccrued interest represented in such deferred payments.

senate report no. 95–989

The bankruptcy court must confirm a plan if (1) the plan satisfies the provisions of chapter 13 and other applicable provisions of title 11; (2) it is proposed in good faith; (3) it is in the best interests of creditors, and defined by subsection (a)(4) of Section 1325; (4) it has been accepted by the holder of each allowed secured claim provided for the plan or where the holder of any such secured claim is to receive value under the plan not less than the amount of the allowed secured claim, or where the debtor surrenders to the holder the collateral securing any such allowed secured claim; (5) the plan is feasible; and (6) the requisite fees and charges have been paid.

Subsection (b) authorizes the court to order an entity, as defined by Section 101(15), to pay any income of the debtor to the trustee. Any governmental unit is an entity subject to such an order.

Editorial Notes

Amendments

**2020**—Subsec. (b)(2). Pub. L. 116–136, §1113(b)(2)(A)(ii), struck out "payments made under Federal law relating to the national emergency declared by the President under the National Emergencies Act (50 U.S.C. 1601 et seq.) with respect to the coronavirus disease 2019 (COVID–19)," after "other than" in introductory provisions.

Pub. L. 116–136, §1113(b)(1)(B), inserted "payments made under Federal law relating to the national emergency declared by the President under the National Emergencies Act (50 U.S.C. 1601 et seq.) with respect to the coronavirus disease 2019 (COVID–19)," after "other than" in introductory provisions.

Subsec. (d). Pub. L. 116–260, §320(f)(2)(A)(v), contingent on its addition by Pub. L. 116–260, §320(e), struck out subsec. (d) which read as follows: "Notwithstanding section 1322(a)(2) of this title and subsection (b)(1) of this section, a plan that provides for payment of a claim of a kind specified in section 503(b)(10) of this title may be confirmed if the plan proposes to make payments on account of such claim when due under the terms of the loan giving rise to such claim."

Pub. L. 116–260, §320(e), added subsec. (d).

**2010**—Subsec. (a). Pub. L. 111–327, §2(a)(44)(A), inserted "period" after "910-day" in concluding provisions.

Subsec. (b)(2)(A)(ii). Pub. L. 111–327, §2(a)(44)(B), inserted closing parenthesis after "548(d)(3)".

**2006**—Subsec. (b)(3). Pub. L. 109–439 inserted ", other than subparagraph (A)(ii) of paragraph (2)," after "under paragraph (2)" in introductory provisions.

**2005**—Subsec. (a). Pub. L. 109–8, §306(b), inserted concluding provisions at end "For purposes of paragraph (5), section 506 shall not apply to a claim described in that paragraph if the creditor has a purchase money security interest securing the debt that is the subject of the claim, the debt was incurred within the 910-day preceding the date of the filing of the petition, and the collateral for that debt consists of a motor vehicle (as defined in section 30102 of title 49) acquired for the personal use of the debtor, or if collateral for that debt consists of any other thing of value, if the debt was incurred during the 1-year period preceding that filing."

Subsec. (a)(5)(B)(i). Pub. L. 109–8, §306(a), amended cl. (i) generally. Prior to amendment, cl. (i) read as follows: "the plan provides that the holder of such claim retain the lien securing such claim; and".

Subsec. (a)(5)(B)(iii). Pub. L. 109–8, §309(c)(1), added cl. (iii).

Subsec. (a)(7). Pub. L. 109–8, §102(g), added par. (7).

Subsec. (a)(8). Pub. L. 109–8, §213(10), added par. (8).

Subsec. (a)(9). Pub. L. 109–8, §716(a), added par. (9).

Subsec. (b)(1)(B). Pub. L. 109–8, §318(2), substituted "applicable commitment period" for "three-year period".

Pub. L. 109–8, §102(h)(1), inserted "to unsecured creditors" after "to make payments".

Subsec. (b)(2), (3). Pub. L. 109–8, §102(h)(2), added pars. (2) and (3) and struck out former par. (2) which read as follows: "For purposes of this subsection, 'disposable 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 continuation, 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 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".

**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" before "other".

Subsecs. (b), (c). Pub. L. 98–353, §317(2), (3), added subsec. (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 Administrator of the Small Business Administration submits to the Director of the Executive Office for United States Trustees a written determination relating to loan eligibility 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 became 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 "covered 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 section 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 adjusted by notices of the Judicial Conference of the United States pursuant to section 104 of this title as follows:

By notice dated Jan. 30, 2025, 90 F.R. 8941, effective Apr. 1, 2025, in subsec. (b), dollar amount "825" was adjusted to "925" 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 Jan. 31, 2022, 87 F.R. 6625, effective Apr. 1, 2022, in subsec. (b), dollar amount "750" was adjusted to "825" each time it appeared.

By notice dated Feb. 5, 2019, 84 F.R. 3488, effective Apr. 1, 2019, in subsec. (b), dollar amount "700" was adjusted 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 adjusted 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 adjusted 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 adjusted to "575" each time it appeared.

1 See Adjustment of Dollar Amounts notes below.

Guides that rely on 11 U.S.C. § 1325

Plain-language explanations on this site that cite this section.

By Antonio G. Jimenez, Esq. · Florida Bar No. 21022

Last reviewed July 25, 2026 · Sources verified July 25, 2026 · How we verify

Every figure on this page is drawn from a primary legal source and checked against our canonical legal database before publication. Bankruptcy.law is not a law firm and does not provide legal advice.

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