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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 on that the payment that is last due following the date by which the ultimate re payment beneath the plan is born. Since a Chapter 13 plan cannot meet or exceed 5 years, the ultimate re re payment on student loans that are most should be due following the Chapter 13 plan is finished. Hence, this area of the Bankruptcy Code would appear to permit a debtor to keep in order to make regular education loan re re payments straight to the financial institution, not in the plan. The main benefit of performing this is the fact that the debtor would stay present on both the key and interest for the education loan, while during the time that is same 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 program doesn’t discriminate unfairly against any course. Exactly exactly What comprises unfair discrimination is a factual matter that must definitely be based on the bankruptcy court on a case by instance foundation. Continue reading