Separate category of Student Loan Debt in Chapter 13

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 payments for claims by that your final repayment is due following the date on which the ultimate re payment underneath the plan flow from. Since a Chapter 13 plan cannot meet or exceed 5 years, the ultimate re payment on many figuratively speaking is going to be due following the Chapter 13 plan is finished. Thus, https://myinstallmentloans.net this area of the Bankruptcy Code would appear to permit a debtor to carry on which will make student that is regular re payments straight to the lending company, outside 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 at the exact same time repaying other creditors through the Chapter 13 plan.

Nonetheless, § 1322(b)(1) states that the Chapter 13 plan may designate separate classes of unsecured claims, but as long as the master plan doesn’t discriminate unfairly against any course. What constitutes discrimination that is unfair a factual matter that needs to be based on the bankruptcy court on an instance by situation basis.Continue Reading