Such a plan may compete with a plan filed by another party in interest or by the debtor. Such a plan often allows the debtor in possession to liquidate the business under more economically advantageous circumstances than a chapter 7 liquidation. If the exclusive period expires before the debtor has filed and obtained acceptance of a plan, other parties in interest in a case, such as the creditors' committee or a creditor, may file a plan. In a chapter 11 case, a liquidating plan is permissible.Similar to the Chapter 7 trustee, the Chapter 13 trustee acts as the main point of contact for a debtor.The trustee will review the proposed payment plan and has the authority to challenge the plan in bankruptcy court if he or she believes that it is improper.You're expected to devote your disposable income to your plan payment, and that extra money will be used to pay unsecured creditors like those credit cards and medical bills.
There is another type of bankruptcy that individuals use to reorganize their debts. Unlike Chapter 7, Chapter 13 does not involve liquidation.
Those payments can be caught up with the payment plan over time, thereby saving the house from foreclosure or the car from repossession.
The plan will also include any past due priority claims, like alimony, child support, or recent income taxes.
Under section 1127(a) of the Bankruptcy Code, the plan proponent may modify the plan at any time before confirmation, but the plan as modified must meet all the requirements of chapter 11.
When there is a proposed modification after balloting has been conducted, and the court finds after a hearing that the proposed modification does not adversely affect the treatment of any creditor who has not accepted the modification in writing, the modification is deemed to have been accepted by all creditors who previously accepted the plan.
In practice, debtors typically seek extensions of both the plan filing and plan acceptance deadlines at the same time so that any order sought from the court allows the debtor two months to seek acceptances after filing a plan before any competing plan can be filed. A proponent of a plan is subject to the same requirements as the debtor with respect to disclosure and solicitation.