11 U.S.C. § 1191

Current through P.L. 118-106 (published on www.congress.gov on 10/04/2024)

Section 1191 - Confirmation of plan

(a) TERMS.-The court shall confirm a plan under this subchapter only if all of the requirements of section 1129(a), other than paragraph (15) of that section, of this title ¹ are met.

(b) EXCEPTION.-Notwithstanding section 510(a) of this title, if all of the applicable requirements of section 1129(a) of this title, other than paragraphs (8), (10), and (15) of that section, are met with respect to a plan, the court, on request of the debtor, shall confirm the plan notwithstanding the requirements of such paragraphs if the plan does not discriminate unfairly, and is fair and equitable, with respect to each class of claims or interests that is impaired under, and has not accepted, the plan.

(c) RULE OF CONSTRUCTION.-For purposes of this section, the condition that a plan be fair and equitable with respect to each class of claims or interests includes the following requirements:

(1) With respect to a class of secured claims, the plan meets the requirements of section 1129(b)(2)(A) of this title.

(2) As of the effective date of the plan-

(A) the plan provides that all of the projected disposable income of the debtor to be received in the 3-year period, or such longer period not to exceed 5 years as the court may fix, beginning on the date that the first payment is due under the plan will be applied to make payments under the plan; or

(B) the value of the property to be distributed under the plan in the 3-year period, or such longer period not to exceed 5 years as the court may fix, beginning on the date on which the first distribution is due under the plan is not less than the projected disposable income of the debtor.

(3)

(A) The debtor will be able to make all payments under the plan; or

(B)

(i) there is a reasonable likelihood that the debtor will be able to make all payments under the plan; and

(ii) the plan provides appropriate remedies, which may include the liquidation of nonexempt assets, to protect the holders of claims or interests in the event that the payments are not made.

(d) DISPOSABLE INCOME.-For purposes of this section, the term "disposable income" means the income that is received by the debtor and that is not reasonably necessary to be expended-

(1) for-

(A) the maintenance or support of the debtor or a dependent of the debtor; or

(B) a domestic support obligation that first becomes payable after the date of the filing of the petition; or

(2) for the payment of expenditures necessary for the continuation, preservation, or operation of the business of the debtor.

(e) SPECIAL RULE.-Notwithstanding section 1129(a)(9)(A) of this title, a plan that provides for the payment through the plan of a claim of a kind specified in paragraph (2) or (3) of section 507(a) of this title may be confirmed under subsection (b) of this section.

¹ So in original. The words "of this title" probably should follow "1129(a)".

11 U.S.C. § 1191

Added Pub. L. 116-54, §2(a), Aug. 23, 2019, 133 Stat. 1082; amended Pub. L. 116-260, div. N, title III, §320(c), (f) (2)(A)(iii), Dec. 27, 2020, 134 Stat. 2016, 2017; Pub. L. 117-151, §2(f), June 21, 2022, 136 Stat. 1299.

EDITORIAL NOTES

AMENDMENTS2022-Subsec. (c)(3). Pub. L. 117-151 added par. (3) and struck out former par. (3) which read as follows:"(3)(A)(i) The debtor will be able to make all payments under the plan; or"(ii) there is a reasonable likelihood that the debtor will be able to make all payments under the plan; and"(B) the plan provides appropriate remedies, which may include the liquidation of nonexempt assets, to protect the holders of claims or interests in the event that the payments are not made." 2020-Subsec. (f). Pub. L. 116-260, §320(f)(2)(A)(iii), contingent on its addition by Pub. L. 116-260, §320(c), struck out subsec. (f). Text read as follows: "Notwithstanding section 1129(a)(9)(A) of this title and subsection (e) 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 under subsection (b) of this section 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(c), added subsec. (f).

STATUTORY NOTES AND RELATED SUBSIDIARIES

EFFECTIVE DATE OF 2022 AMENDMENT Amendment by Pub. L. 117-151 applicable with respect to any case that is commenced under this title on or after Mar. 27, 2020, and with respect to a case that was commenced on or after Mar. 27, 2020, and before June 21, 2022, that is pending on June 21, 2022, see section 2(h)(2) of Pub. L. 117-151 set out as an Effective Date of 2022 Amendment; Retroactive Application note under section 101 of this title.

EFFECTIVE AND TERMINATION DATES OF 2020 AMENDMENTAmendment by section 320(c) 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)(iii) 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.]

EFFECTIVE DATESection effective 180 days after Aug. 23, 2019, see section 5 of Pub. L. 116-54 set out as an Effective Date of 2019 Amendment note under section 101 of this title.

claim: The term "claim" means-(A) right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured; or(B) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured.
debtor: The term "debtor" means person or municipality concerning which a case under this title has been commenced.(13A) The term "debtor's principal residence"-(A) means a residential structure if used as the principal residence by the debtor, including incidental property, without regard to whether that structure is attached to real property; and(B) includes an individual condominium or cooperative unit, a mobile or manufactured home, or trailer if used as the principal residence by the debtor.
domestic support obligation: The term "domestic support obligation" means a debt that accrues before, on, or after the date of the order for relief in a case under this title, including interest that accrues on that debt as provided under applicable nonbankruptcy law notwithstanding any other provision of this title, that is-(A) owed to or recoverable by-(i) a spouse, former spouse, or child of the debtor or such child's parent, legal guardian, or responsible relative; or(ii) a governmental unit;(B) in the nature of alimony, maintenance, or support (including assistance provided by a governmental unit) of such spouse, former spouse, or child of the debtor or such child's parent, without regard to whether such debt is expressly so designated;(C) established or subject to establishment before, on, or after the date of the order for relief in a case under this title, by reason of applicable provisions of-(i) a separation agreement, divorce decree, or property settlement agreement;(ii) an order of a court of record; or(iii) a determination made in accordance with applicable nonbankruptcy law by a governmental unit; and(D) not assigned to a nongovernmental entity, unless that obligation is assigned voluntarily by the spouse, former spouse, child of the debtor, or such child's parent, legal guardian, or responsible relative for the purpose of collecting the debt.
petition: The term "petition" means petition filed under section 301, 302, 303 and 3 1504 of this title, as the case may be, commencing a case under this title.(42A) The term "production payment" means a term overriding royalty satisfiable in cash or in kind-(A) contingent on the production of a liquid or gaseous hydrocarbon from particular real property; and(B) from a specified volume, or a specified value, from the liquid or gaseous hydrocarbon produced from such property, and determined without regard to production costs.