Tag: 1322(b)(1)

Bankr.  M.D.N.C.: In re Price- Separate Classification of Student Loans in Chapter 13Bankr.  M.D.N.C.: In re Price- Separate Classification of Student Loans in Chapter 13

Summary:

The Prices, who are above median income debtors, but nonetheless have negative projected disposable monthly and no non-exempt assets, proposed an estimated 15% dividend to the class of dischargeable general unsecured creditors, which totaled $11,728.38.  They also proposed to separately classify the  $10,463.48 claim by Navient for non-dischargeable student loans.  The Chapter 13 Trustee supported confirmation, but the Bankruptcy Administrator filed a limited objection to such treatment.
The bankruptcy court first addressed whether the prohibition in  §1322(b)(1) against “unfair discrimination” in favor of one class of unsecured creditors was applicable as  §1322(b)(5) allows the a plan to cure and maintain payments on “any unsecured claim … on which the last payment is due after the date on which the final payment under the plan is due.”  While recognizing a split in opinions on this question, the court held that since §1322(b)(5) specifically applies despite the limitations in §1322(b)(2), it does not similarly explicitly override the “unfair discrimination” restrictions in §1322(b)(1). … Read More

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