11 U.S.C. Section 1225 -- Confirmation of Chapter 12 Plan

What Is Section 1225?

Section 1225 of Title 11 of the United States Code (Confirmation of Plan (Chapter 12)) is a foundational provision of the Bankruptcy Code. It specifies the requirements for confirming a Chapter 12 plan for family farmers and family fishermen. The requirements parallel Chapter 13 confirmation under Section 1325 but include provisions specific to agricultural operations.

Key Provisions of Section 1225

Key Chapter 12 confirmation requirements:

• Good faith: The plan must be proposed in good faith.
• Best interests test: Unsecured creditors must receive at least as much as they would in Chapter 7.
• Feasibility: The debtor must be able to make all plan payments.
• Disposable income: If the trustee objects, all disposable income must be committed to the plan for the applicable period.
• Secured creditor treatment: Secured claims must be properly treated (retain lien, receive present value of claim).

How This Affects You

Chapter 12 is specifically designed for farming and fishing operations:

• Farm operations have seasonal and cyclical income that standard Chapter 13 cannot accommodate well
• Chapter 12 allows modification of all secured claims, including farmland mortgages (unlike Chapter 13's anti-modification rule for primary residences)
• The debt limits are higher than Chapter 13, accommodating the capital-intensive nature of farming

Related Bankruptcy Code Sections

Section 1225 works in conjunction with several other provisions of the Bankruptcy Code:

• Section 1201 -- Co-debtor stay in Chapter 12
• Section 1322 -- Chapter 13 plan contents (parallel)

Understanding how these sections interact is critical for anyone navigating the bankruptcy process, whether as a debtor, creditor, or attorney.