Chapter 27 - § 27.9 • PLANS AND THEIR CONFIRMATION

• Jurisdiction: Colorado

§ 27.9 • PLANS AND THEIR CONFIRMATION

§ 27.9.1—In General

A Chapter 11 debtor may,²¹³ and a Chapter 13 debtor must,²¹⁴ file a plan. The contents of the plan are prescribed by statute.²¹⁵

A chapter 13 plan may modify the rights of holders of secured claims, other than a claim secured only by a security interest in real property that is the debtor's principal residence.²¹⁶ (The debtor may obtain a determination of secured status by filing a motion under 11 U.S.C. § 506.²¹⁷ ) Nevertheless, a plan may reflect a previously agreed modification of a security agreement in the debtor's principal residence.²¹⁸ A Chapter 13 debtor may "strip" a wholly unsecured second lien against his or her residence under 11 U.S.C. § 506, even after the debtor has received a discharge of the debt in a prior Chapter 7 proceeding filed less than four years prior to the subsequent Chapter 13 proceeding.²¹⁹

§ 27.9.2—Confirmation of Plan

Except as otherwise provided in a plan or the order confirming a plan,²²⁰ the confirmation of a plan vests all of the property of the estate in the debtor.²²¹ The United States Bankruptcy Court for the District of Colorado has followed the rule that the vesting so provided for does not terminate the estate but does transfer to the debtor most, if not all, of the property of the estate at the time of confirmation.²²²

With certain exceptions, and except as otherwise provided in a Chapter 11 plan or in the order confirming the plan, the property dealt with by the plan is free and clear of all claims and interests of creditors, equity security holders, and general partners of the debtor.²²³ A lien is not extinguished by silence as to its survival in a plan unless it is dealt with in the plan, that is, provision is made in the plan for the payment or securing of the claim.²²⁴ Except as otherwise provided in a Chapter 13 plan or in the order confirming the plan, the property vesting in the debtor is free and clear of any claim or interest of any creditor provided for by the plan.²²⁵

Once a plan is confirmed and the property of the estate has vested in the debtor, the secured creditor's rights are defined strictly by the provisions of the plan. In other words, the plan itself has the effect of making a new agreement between the debtor and the creditor with a new obligation to be paid in the manner provided by the terms of the plan.²²⁶

The debtor is bound by the terms of his or her confirmed plan.²²⁷

§ 27.9.3—Modification of Plan

A chapter 13 plan may modify the rights of holders of secured claims, other than a claim secured only by a security interest in real property that is the debtor's principal residence.²²⁸ (The debtor may obtain a determination of secured status by filing a motion under 11 U.S.C. § 506.²²⁹ ) Nevertheless, a plan may reflect a...