Under 11 U.S.C. 1306, property of the estate in a Chapter 13 case includes everything you owned when you filed plus two things that keep accumulating while the case is open: property of the kind described in Section 541 that you acquire after filing, and earnings from services you perform after filing. The window runs from the petition date until the case is closed, dismissed, or converted. You keep possession of it all while the plan runs, but the trustee has a claim on it to fund payments to creditors.1Office of the Law Revision Counsel. 11 U.S. Code 1306 – Property of the Estate
That is the practical difference between Chapter 13 and Chapter 7. In Chapter 7, the estate is a snapshot on the filing date and your later paycheck is your own. In Chapter 13, the estate keeps growing, because your future income is what pays the plan.
The Two Categories Section 1306 Adds
Subsection (a)(1) pulls in any property specified in Section 541 that you acquire after filing and before the case ends. Subsection (a)(2) pulls in earnings from services performed during that same period. Subsection (b) then softens the effect: you remain in possession of estate property unless a confirmed plan or court order says otherwise. A Chapter 13 trustee does not seize your house or car the way a Chapter 7 trustee liquidates assets. You keep using what you own while you pay.
Property You Acquire After Filing
If you buy a house, receive a legal settlement, get a lawsuit payout, collect stock dividends, receive a trust distribution, or take in rental or royalty income while the case is open, those assets enter the estate. You cannot freely sell or transfer significant assets without notifying the trustee, and court approval is often required for major transactions.
Inheritances are the point where Section 1306 diverges most sharply from the general rule. Section 541(a)(5) sweeps in inheritances you become entitled to within 180 days of filing regardless of chapter.2Office of the Law Revision Counsel. 11 U.S. Code 541 – Property of the Estate In Chapter 13, Section 1306 pushes that further: an inheritance received at any point during the case becomes estate property, not just within the 180-day window. Failing to disclose that kind of windfall is one of the fastest ways to have a case dismissed or draw fraud allegations.
Any major financial change during the case must be reported to the trustee, and you must provide annual tax returns. Tax refunds may need to be turned over depending on your district’s practices and the terms of your confirmed plan.3Office of the Law Revision Counsel. 11 U.S. Code 521 – Debtor’s Duties
Earnings After Filing
Wages, salary, bonuses, commissions, and self-employment profits earned after you file are all estate property under Section 1306(a)(2). This is the single biggest practical consequence of the statute. Your paycheck is the engine of the plan.
How much of that income actually reaches creditors is set by the disposable income test in Section 1325(b). If the trustee or any unsecured creditor objects to your plan, the court can confirm it only if you commit all of your projected disposable income for the applicable commitment period. Disposable income is your current monthly income minus what is reasonably necessary to support you and your dependents, plus any domestic support obligations.4Office of the Law Revision Counsel. 11 U.S. Code 1325 – Confirmation of Plan The IRS National and Local Standards supply the baseline expense figures for food, clothing, housing, utilities, and transportation, with room to use higher actual amounts in some categories.
How Long the Plan Lasts
The commitment period tracks your household income against your state’s median family income for a household of your size. Below the median, the plan runs up to three years, with a court able to extend it to five for cause. At or above the median, the plan runs up to five years. No plan can exceed five years.5Office of the Law Revision Counsel. 11 U.S. Code 1322 – Contents of Plan
When Income Changes
If your earnings rise significantly during the plan, the trustee or a creditor can move to increase your payments under Section 1329. The same provision works in reverse when you lose a job or face unexpected expenses. Courts consider whether the change is likely to be permanent before adjusting.6Office of the Law Revision Counsel. 11 U.S. Code 1329 – Modification of Plan After Confirmation Self-employed debtors face closer scrutiny; trustees typically require regular profit and loss statements, and surplus revenue beyond what the plan accounts for can trigger a modification request.
What Confirmation Does to the Estate
Section 1327(b) says that on confirmation, all property of the estate vests in you unless the plan or confirmation order provides otherwise, and it vests free and clear of any creditor claim addressed by the plan.7Office of the Law Revision Counsel. 11 U.S. Code 1327 – Effect of Confirmation That sits awkwardly next to Section 1306, which keeps pulling new property and earnings into the estate throughout the case.
Courts have split into three approaches. The majority view holds that property owned on the filing date vests in the debtor at confirmation under 1327, while property acquired afterward still enters the estate under 1306 and does not automatically vest back. A minority view holds that the estate ends at confirmation and everything belongs to the debtor. A middle-ground approach keeps in the estate only property needed to fund the plan and vests the rest in the debtor.
Which view your court follows matters. It affects whether creditors can reach your post-confirmation wages and whether you need trustee permission to sell property acquired after confirmation. Ask a local bankruptcy attorney which rule applies in your district before making moves on post-confirmation assets.
If the Case Converts to Chapter 7
Conversion changes the estate calculation, and Section 348(f) sets two very different outcomes depending on your good faith. A good-faith conversion limits the Chapter 7 estate to property you owned on the original Chapter 13 filing date that is still in your possession on the conversion date. Property and earnings you picked up during the Chapter 13 case stay with you and are not part of the Chapter 7 liquidation estate.8Office of the Law Revision Counsel. 11 U.S. Code 348 – Effect of Conversion
A bad-faith conversion produces the opposite result. If the court finds bad faith, the Chapter 7 estate includes everything you own on the conversion date, including property acquired during the failed Chapter 13. The penalty is designed to stop debtors from using Chapter 13 to shelter assets and then converting to Chapter 7 after accumulating property outside the original estate’s reach.
When Section 1306 Stops Applying
Section 1306 operates only while the case is open. When you complete all plan payments and certify that any domestic support obligations are current, the court grants a discharge under Section 1328(a), eliminating your personal liability on most debts provided for by the plan.9Office of the Law Revision Counsel. 11 U.S. Code 1328 – Discharge Certain debts survive, including long-term obligations like mortgages that extend past the plan period, certain tax debts, student loans, criminal restitution, and debts arising from willful injury to another person.
Once the discharge is entered and the case closes, your future earnings and property acquisitions are yours alone, no longer swept into an estate. Property that vested in you under the plan stays yours, clear of the creditor claims the plan addressed. Dismissal or conversion ends the Section 1306 estate too, though with the property consequences described above rather than a discharge.