Q

Must all of my creditors approve of my chapter 13 plan?

A

No, a chapter 13 plan, in order to become effective, need only be approved by the Bankruptcy Court. Unlike chapter 11, the chapter 13 creditors are not afforded the opportunity to vote on the plan. The Bankruptcy Court cannot, however, approve a plan unless the secured creditors are dealt with appropriately. The Bankruptcy Court will approve the chapter 13 plan only if: (1) the secured creditors accept the proposed plan; (2) the secured creditor retains its lien and is paid the full amount of its secured claim under the plan; (3) the debtor surrenders the collateral to the secured creditor; or (4) the secured creditor is paid outside of the chapter 13 plan and its claim remains unmodified by the chapter 13 plan. Also note that unsecured creditors are permitted to file objections to the chapter 13 plan, and that these objections must be ruled on by the Bankruptcy Court before it can approve the chapter 13 plan.