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Separate category of Student Loan Debt in Chapter 13

Separate category of Student Loan Debt in Chapter 13

Under Bankruptcy Code § 1322(b)(5), a Chapter 13 plan may enable upkeep of re payments for claims upon that the final repayment is due following the date by which the last re payment underneath the plan arrives. Since a Chapter 13 plan cannot meet or exceed 5 years, the ultimate re payment on many student education loans is due following the Chapter 13 plan is finished. Hence, this part of the Bankruptcy Code would appear to enable a debtor to keep to help make student that is regular re re payments right to the financial institution, not in the plan. The advantage of doing this is the fact that debtor would remain present on both the key and interest when it comes to education loan, while during the exact same time repaying other creditors through the Chapter 13 plan.

Nonetheless, § 1322(b)(1) states that a Chapter 13 plan may designate separate classes of unsecured claims, but only when the master plan doesn’t discriminate unfairly against any course. Just just What comprises discrimination that is unfair a factual matter that really must be dependant on the bankruptcy court on an instance by situation foundation.Continue reading