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A loan would likely be tacked on to the mortgage, for repayment over time.
Chapter 13, in turn, would require partial repayment over five years.
Unsecured creditors may choose to receive either immediate payment of 60percentt of their claims in cash this year plus 10percentt over four years, or full repayment over four years.
Options are likely to be spelt out, including the possibility of full repayment over a longer time, of 10 or 15 years, or a one-off upfront payment at a significant discount to the money owed.
It will also restrict these loans to a maximum 30-year term, in order to prevent borrowers taking out larger mortgages by spreading out repayment over a longer period.
This is similar to the multibillion-pound transformation of university funding, which is reliant on upfront funding from a debt vehicle – the Student Loans Company – and the repayment over many years by graduates.
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According to Christine Lagarde, the French finance minister, the loans will stretch over ten years: three years without repayment, followed by repayments over about seven years.
The Enron Corporation told investors yesterday that it faced debt repayments over the next year vastly in excess of its available cash.
"The costs of the loan system are based on projections of graduate repayments over the next 35 years," he said.
Over half of all dairy farmers have increased their borrowings or deferred debt repayments over the past year to cope with this crisis.
The school construction effort, which could cost $15 billion in bond repayments over 30 years, may well exceed that in any other state, officials said.
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