Source: https://lundinonchapter13.com/Content/Section/88.2
Timestamp: 2019-10-24 05:03:08
Document Index: 407379240

Matched Legal Cases: ['§ 88', '§ 88', '§ 1328', '§ 507', '§ 523', '§ 523', '§ 523', '§ 523', '§ 523', '§ 523', '§ 523', '§ 1322', '§ 523', '§ 523', '§ 523', '§ 1322', '§ 1322', '§ 1322', '§ 507', '§ 101', '§ 1328', '§ 507', '§ 523', '§ 1328', '§ 507', '§ 507', '§ 1328', '§ 507', '§ 1322', '§ 507', '§ 523', '§ 507', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 507', '§ 507', '§ 1322', '§ 1322', '§ 1322', '§ 101', '§ 552', '§ 523', '§ 159', '§ 523', '§ 507', '§ 548', '§ 159', '§ 523', '§ 548', '§ 159', '§ 523', '§ 548', '§ 159', '§ 523', '§ 549', '§ 523', '§ 159', '§ 523', '§ 523', '§ 551', '§ 523', '§ 159', '§ 523', '§ 523', '§ 550', '§ 523', '§ 159', '§ 523', '§ 1328', '§ 554', '§ 1328', '§ 159', '§ 1328', '§ 88', '§ 1322', '§ 149', '§ 87', '§ 153', '§ 88', '§ 88', '§ 88', '§ 1322', '§ 151', '§ 87', '§ 73', '§ 87', '§ 73', '§ 87', '§ 88', '§ 1322', '§ 136', '§ 159', '§ 523', '§ 507', '§ 440', '§ 73', '§ 136', '§ 98', '§ 73', '§ 73', '§ 1322', '§ 459', '§ 1322', '§ 88', '§ 1322', '§ 345', '§ 158', '§ 158', '§ 459', '§ 1322', '§ 88', '§ 1322', '§ 1322', '§ 458', '§ 1322', '§ 88', '§ 1322', '§ 507', '§ 519', '§ 136', '§ 523', '§ 159', '§ 523', '§ 153', '§ 88', '§ 88', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1325', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1325', '§ 1322', '§ 1322', '§ 1322', '§ 1325', '§ 1322', '§ 1325', '§ 1325', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1322', '§ 1325', '§ 707', '§ 707', '§ 1322', '§ 1325', '§ 1325', '§ 1322', '§ 1322', '§ 1325', '§ 1322', '§ 101']

§ 88.2 Nondischargeable Claims after BAPCPA
Cite as: Keith M. Lundin, Lundin On Chapter 13, § 88.2, at ¶ ____, LundinOnChapter13.com (last visited __________).
Updater Cases (29)
Chapter 13 still provides the broadest discharge available to an individual debtor under any chapter of the Bankruptcy Code, but BAPCPA carved away at that broader discharge in several ways that will have implications for the classification of claims.
BAPCPA enlarged the exception to discharge for domestic support obligations1 (DSOs). BAPCPA added to § 1328(a) seven new exceptions to discharge at the completion of payments under a Chapter 13 plan:
Trust fund taxes a debtor is required to collect or withhold, described in § 507(a)(8)(C).2
Taxes with respect to which a return was not filed or was filed late and within two years before the petition, described in § 523(a)(1)(B).3
A tax or custom duty with respect to which the debtor made a fraudulent return or willfully attempted to evade or defeat taxes under § 523(a)(1)(C).4
Claims for false pretenses, false representations or actual fraud under § 523(a)(2).5
Claims not listed or scheduled in time to permit the timely filing of a proof of claim or the timely filing of a complaint objecting to dischargeability under § 523(a)(2), (4) or (6) as described in § 523(a)(3).6
Claims for fraud or defalcation while acting in a fiduciary capacity, embezzlement or larceny, described in § 523(a)(4).7
Claims for damages or restitution awarded in a civil action as a result of willful or malicious injury by the debtor that caused personal injury or death.8
Several of these new exceptions to discharge will be common in Chapter 13 cases. In particular, the exception to discharge in § 523(a)(2)—for false pretenses, misrepresentation or actual fraud—will involve Chapter 13 debtors in credit card dischargeability litigation that heretofore has been confined to Chapter 7 cases. These new and expanded exceptions to discharge will provide new incentives for Chapter 13 debtors to separately classify claims that are or might be nondischargeable.9 Chapter 13 debtors don’t want to be stuck with large nondischargeable debts at the end of years of payment to creditors through a plan. Many debts that are now nondischargeable in Chapter 13 cases will accumulate nondischargeable postpetition interest if the claims are not paid during the Chapter 13 case.
In any Chapter 13 case in which the debtor is not financially able to pay all unsecured claims in full, the separate classification of a nondischargeable debt for more favorable treatment implicates the unfair discrimination standard in § 1322(b)(1).10 In general, the appellate courts have concluded that the nondischargeable character of a debt, by itself, does not justify separate classification for more favorable treatment.11
Several of the new exceptions to discharge at completion of payments under a Chapter 13 plan have no other special attributes that bear on the fairness of separate classification. For example, the new exception to discharge at the completion of payments in Chapter 13 cases for debts described in § 523(a)(2) will saddle many Chapter 13 debtors with nondischargeable debts for credit card purchases of luxury goods and services within 90 days of the petition and for cash advances within 70 days of the petition. It will be difficult to convince bankruptcy courts of the fairness of discrimination of any plan that separately classifies these nondischargeable claims for more favorable treatment than other unsecured creditors. The same is likely to be true for unscheduled debts under § 523(a)(3) and for debts for fraud or defalcation in a fiduciary capacity, embezzlement or larceny described in § 523(a)(4). The new exception to discharge for restitution or damages awarded in a civil action as a result of willful or malicious injury by the debtor could produce large claims that will be unmanageable without separate classification, but any such plan is likely to run squarely into the unfair discrimination test.
When a nondischargeable debt is also a priority claim, the courts have looked more favorably on separate classification in Chapter 13 cases. This results in part from the structure of § 1322. The unfair discrimination test of separate classification in § 1322(b)(1) is “subject to” the mandatory provision in § 1322(a)(2) that a Chapter 13 plan must provide for the full payment of claims entitled to priority under § 507.12
Among the new and expanded exceptions to discharge in Chapter 13 cases are several debts that are both priority claims and nondischargeable after BAPCPA. For example, the expanded definition of DSO in § 101(14A) creates a larger class of debts for alimony, maintenance and support that are both nondischargeable at the completion of payments in a Chapter 13 case under § 1328(a)(2) and entitled to priority under § 507(a)(1).13 It is anticipated that most courts will permit the separate classification of DSOs for payment in full with accruing postpetition interest notwithstanding that the debtor is not financially able to pay all unsecured claims in full with postpetition interest.
The same outcome is likely with respect to debts for personal injury or death caused by/resulting from driving or boating while intoxicated as described in § 523(a)(9). These debts were nondischargeable at the completion of payments in a Chapter 13 case under § 1328(a)(2) before BAPCPA, but BAPCPA added a new priority for most DWI claims in § 507(a)(10).14 DWI claims that are now both nondischargeable and entitled to priority in a Chapter 13 case are candidates for separate classification for more favorable treatment and should survive the unfair discrimination test for the same reasons that separate classification of a DSO is generally permitted.
After BAPCPA, there will also be some tax claims that are both nondischargeable and entitled to priority. For example, trust fund taxes collected or withheld by a Chapter 13 debtor are entitled to priority under § 507(a)(8)(C) and full payment through a Chapter 13 plan and are now also nondischargeable under § 1328(a)(2). Before BAPCPA, tax claims described in § 507(a)(8)(C) were priority claims entitled to full payment through a Chapter 13 plan but without postpetition interest under § 1322(a)(2).15 Trust fund taxes specified in § 507(a)(8)(C) are still priority claims that must be paid in full, but interest will now accrue during the administration of the Chapter 13 case and that interest will be nondischargeable at the completion of payments under the plan. The same will be true for the new nondischargeable taxes described in § 523(a)(1)(B) and (C) to the extent those taxes are also entitled to priority under § 507(a)(8).
The likelihood of successful classification of these new nondischargeable priority taxes is greater than for debts that are only nondischargeable and not entitled to priority.
Two other statutory changes by BAPCPA could affect the classification picture for nondischargeable debts in Chapter 13 cases. Discussed in detail elsewhere, § 1322(b)(10) was amended by BAPCPA to permit a Chapter 13 plan to pay postpetition interest to the holder of a nondischargeable claim to the extent the debtor has disposable income available after making provision for “full payment of all allowed claims.”16 As a general rule, the interest that accrues by judgment or applicable law on a nondischargeable debt partakes of the same nondischargeable character as the underlying debt.17 Chapter 13 debtors want to separately classify nondischargeable debts for payment of postpetition interest to avoid a potentially substantial accumulation of nondischargeable interest during the Chapter 13 case.
New § 1322(b)(10) gives Chapter 13 debtors a limited license to pay postpetition interest to the holder of a nondischargeable claim when all other allowed claims are provided full payment under the plan. Unfortunately, it is not clear what “full payment” means in this context and, perhaps more importantly, there is no statutory exception in new § 1322(b)(10) to the unfair discrimination test for separate classification in § 1322(b)(1).18 This means that Chapter 13 debtors able to pay all allowed claims in full who propose to pay postpetition interest to the holder of a nondischargeable claim may encounter difficulties with the unfair discrimination that results when other unsecured claim holders are not being paid postpetition interest through the plan.
Finally, BAPCPA added a new subsection (4) to § 1322(a) which permits a Chapter 13 plan to provide less than full payment of a DSO that is assigned to or payable to a governmental entity as described in § 507(a)(1)(B) if the plan provides that all of the debtor’s projected disposable income for five years will be applied to make payments under the plan.19 DSOs assigned to or payable to a governmental entity under § 507(a)(1)(B) are priority debts that are also nondischargeable at the completion of payments in a Chapter 13 case.20 New § 1322(a)(4) is statutory permission for Chapter 13 debtors to separately classify DSO claims assigned to the government for less than the full payment to which priority claims are ordinarily entitled so long as five years of disposable income are applied to payments under the plan.
This does not look like an especially useful new power for most Chapter 13 debtors. Most DSO debts will accrue postpetition interest under applicable nonbankruptcy law, and any plan that can’t pay a DSO claim in full will leave the debtor with accumulated unpaid interest at the completion of payments to other creditors under the plan. Perhaps there will be a few Chapter 13 debtors who can’t construct a confirmable Chapter 13 plan without paying less than all of a DSO claim assigned to the government. New § 1322(a)(4) will then be some help, though it is help at a significant price.
All in all, it seems likely that there will be renewed litigation in Chapter 13 cases with respect to the separate classification of nondischargeable debts. Between 1979 and 2005, there was a fair amount of litigation whether Chapter 13 debtors could separately classify nondischargeable student loans for more favorable treatment than other unsecured creditors.21 The addition of many new nondischargeable debts to Chapter 13 by BAPCPA will inspire debtors to attempt separate classifications that will draw fire under the unfair discrimination standard in § 1322(b)(1).
1 11 U.S.C. §§ 101(14A), 523(a)(5) and 1328(a)(2), discussed in § 552.1 [ Domestic Support Obligations: § 523(a)(5) ] § 159.5 Domestic Support Obligations: § 523(a)(5).
2 11 U.S.C. §§ 507(a)(8)(C) and 1328(a)(2), discussed in § 548.1 [ Taxes ] § 159.1 Taxes.
3 See 11 U.S.C. §§ 523(a)(1)(B) and 1328(a)(2), discussed in § 548.1 [ Taxes ] § 159.1 Taxes.
4 See 11 U.S.C. §§ 523(a)(1)(C) and 1328(a)(2), discussed in § 548.1 [ Taxes ] § 159.1 Taxes.
5 See 11 U.S.C. §§ 523(a)(2) and 1328(a)(2), discussed in § 549.1 [ False Representations and Fraud: § 523(a)(2) ] § 159.2 False Representations and Fraud: § 523(a)(2).
6 See 11 U.S.C. §§ 523(a)(3) and 1328(a)(2), discussed in § 551.1 [ Unscheduled Creditors: § 523(a)(3) ] § 159.4 Unscheduled Creditors: § 523(a)(3).
7 See 11 U.S.C. §§ 523(a)(4) and 1328(a)(2), discussed in § 550.1 [ Fraud and Defalcation: § 523(a)(4) ] § 159.3 Fraud and Defalcation: § 523(a)(4).
8 See 11 U.S.C. § 1328(a)(4), discussed in § 554.1 [ Willful or Malicious Injury: § 1328(a)(4) ] § 159.7 Willful or Malicious Injury: § 1328(a)(4).
9 See discussion beginning at § 88.1 In General.
10 11 U.S.C. § 1322(b)(1) is discussed in § 149.1 [ Power to Classify Unsecured Claims: Tests for Unfair Discrimination ] § 87.1 Power to Classify Unsecured Claims: Tests for Unfair Discrimination.
11 See §§ 153.1 [ Student Loans ] § 88.6 Student Loans, 155.1 [ Driving While Intoxicated ] § 88.8 Driving, Boating or Flying while Intoxicated and 156.1 [ Claims That Are or Might Be Nondischargeable Only in a Chapter 7 (Chapter 12, or Individual Chapter 11) Case ] § 88.10 Claims That Are or Might Be Nondischargeable Only in a Chapter 7 (Chapter 12, or Individual Chapter 11) Case.
12 11 U.S.C. § 1322(a) and (b), discussed in §§ 151.1 [ Priority Claims ] § 87.4 Priority Claims, 441.1 [ New and Changed Treatment of Priority Claims ] § 73.6 Treatment of Priority Claims Changed by BAPCPA and 460.1 [ New Priority Claims ] § 87.5 Priority Claims after BAPCPA.
13 See § 73.3 Priority Claims Added or Changed by BAPCPA, § 87.5 Priority Claims after BAPCPA, § 88.5 Domestic Support Obligations Assigned or Payable to Government: § 1322(a)(4) after BAPCPA, § 136.21 Domestic Support Obligations after BAPCPA and § 159.5 Domestic Support Obligations: § 523(a)(5).
14 11 U.S.C. § 507(a)(10), discussed in §§ 440.1 [ New and Changed Priority Claims ] § 73.3 Priority Claims Added or Changed by BAPCPA and 522.1 [ The New DWI Priority ] § 136.22 The Driving or Boating while Intoxicated Priority after BAPCPA.
15 See §§ 98.1 [ Plan Must Provide Full Payment ] § 73.1 Plan Must Provide Full Payment and 100.2 [ Interest Not Required, with Exceptions ] § 73.5 Interest Not Required, with Exceptions.
16 11 U.S.C. § 1322(b)(10), discussed in § 459.1 [ Postpetition Interest on Nondischargeable Claims: § 1322(b)(10) ] § 88.3 Postpetition Interest on Nondischargeable Claims after BAPCPA: § 1322(b)(10).
17 See §§ 345.1 [ Alimony, Maintenance or Support ] § 158.1 Alimony, Maintenance or Support and 346.1 [ Student Loans ] § 158.2 Student Loans.
18 See § 459.1 [ Postpetition Interest on Nondischargeable Claims: § 1322(b)(10) ] § 88.3 Postpetition Interest on Nondischargeable Claims after BAPCPA: § 1322(b)(10).
19 See 11 U.S.C. § 1322(a)(4), discussed in § 458.1 [ Domestic Support Obligations Assigned or Payable to Government: § 1322(a)(4) ] § 88.5 Domestic Support Obligations Assigned or Payable to Government: § 1322(a)(4) after BAPCPA.
20 See 11 U.S.C. §§ 507(a)(1)(B), 523(a)(5) and 1328(a)(2), discussed in §§ 519.1 [ Domestic Support Obligations ] § 136.21 Domestic Support Obligations after BAPCPA and 552.1 [ Domestic Support Obligations: § 523(a)(5) ] § 159.5 Domestic Support Obligations: § 523(a)(5).
21 See §§ 153.1 [ Student Loans ] § 88.6 Student Loans and 155.2 [ Long-Term Debts ] § 88.9 Long-Term Debts.
Copeland v. Fink (In re Copeland), 742 F.3d 811, 813-15 (8th Cir. Jan. 31, 2014) (Wollman, Smith, Kelly) (Plan fails unfair discrimination test that would pay in full nondischargeable, nonpriority taxes and pay nothing to other unsecured creditors. "Some differential or discriminatory treatment is clearly permitted by § 1322(b)(1) . . . . We have adopted a four-part test for unfair discrimination. . . . Nondischargeability alone does not justify special classification . . . . While [Mickelson v. Leser (In re Leser), 939 F.2d 669 (8th Cir. Sept. 17, 1991) (Bowman, Heaney, Dumbauld),] held that the nondischargeability of child-support arrearage reflects a strong public policy in favor of full payment, that public policy does not apply with full force to the Copelands. . . . Had they filed pre-petition tax returns on time, the tax debts would largely be dischargeable. . . . 'The debtor need only formulate a plan which pays [the nondischargeable debts] pro rata with other unsecured creditors during the life of the plan and as a continuing obligation thereafter.' . . . Such a plan may interfere with the 'fresh start' that bankruptcy provides, but it is hardly remarkable that a nondischargeable debt may remain after a debtor has emerged from bankruptcy; that is precisely what 'nondischargeable' means. . . . [T]he Copelands' plan lacks good faith. They propose to pay off as much nondischargeable debt as possible, leaving other creditors with nothing at the close of bankruptcy. . . . [T]hey propose to 'protect' those creditors least in need of protection, at the expense of the most vulnerable."), aff'g 483 B.R. 534, 539 (B.A.P. 8th Cir. Nov. 20, 2012) (Kressel, Schermer, Nail) (Applying four-part test from Mickelson v. Leser (In re Leser), 939 F.2d 669 (8th Cir. Sept. 17, 1991) (Bowman, Heaney, Dumbauld), separate classification of nonpriority, unsecured, nondischargeable tax claims for payment of 94% and no payment of other unsecured debt unfairly discriminates when debtor can confirm level payment 78% plan. "[T]he Debtors argue for 'the public policy of maximum tax collection as the basis for favorable treatment of general unsecured tax claims.' . . . The interest in collecting taxes as advanced by the Debtors is simply not comparable to the public policy in favor of ensuring that child support is paid. . . . Standing alone, the non-dischargeability of a debt is not a proper basis for discrimination against other unsecured non-priority claims. . . . The Debtors do not deny that they are able to carry out a plan without the discrimination. . . . There is no requirement, based on public policy or otherwise, to pay the unsecured non-priority non-dischargeable tax claims in full through the plan.").
Jordahl v. Burrell (In re Jordahl), 539 B.R. 567, 572-73 (B.A.P. 8th Cir. Nov. 2, 2015) (Schermer, Saladino, Nail) (Maintaining payments on long-term student loan violates unfair discrimination test under § 1322(b)(1) and violates prohibition against paying interest on a nondischargeable claim in § 1322(b)(10). "By paying the student loan debt directly, and not through the plan, the effect of what the Debtors did was to separately classify and treat the student loan debt. Therefore, § 1322(b)(1) does apply and the Debtors must comply with the bar on unfair discrimination in that statute. . . . Debtors' plan was unfairly discriminatory under the four-part test. . . . The only reason for the discrimination . . . is . . . that Congress's authorization for debtors to make the student loan payment under § 1322(b)(5) renders such treatment fair under § 1322(b)(1). . . . [S]pecial classification is not justified by the non-dischargeability of the debt standing alone . . . . [Section] 1322(b)(10) applies to and bars the Debtors' proposed treatment of their student loan debt. Section 1322(b)(10) provides that the payment of post-petition interest on a non-dischargeable unsecured claim is permitted only if the debtor's plan provides for full payment of all allowed claims. . . . [E]ach maintenance payment that they seek [to] make to their student loan lenders would include a component of post-petition interest. However, the Debtors did not provide for full payment of all allowed claims.").
Eveland v. Jordan (In re Jordan), No. 13-09093, 2015 WL 920970, at *4, *3 (Bankr. N.D. Iowa Mar. 2, 2015) (Collins) (Applying Archer v. Warner, 538 U.S. 314, 123 S. Ct. 1462, 155 L. Ed. 2d 454 (Mar. 31, 2003), prepetition settlement in which debtor admits debt is nondischargeable that contains no specific factual allegations of fraud does "not equate with a stipulation by Debtor that the elements of a finding of nondischargeability are satisfied." "Archer indicates that Bankruptcy Courts should make a dischargeability determination unless it is clear the parties intended their agreement to have issue and claim preclusive effect. Bankruptcy Courts faced with similar issues after Archer have reiterated that parties' attempts to determine an issue like this one before bankruptcy occurs may violate public policy. 'A prepetition agreement in which the debtor purports to waive the benefits of a bankruptcy discharge is void as against public policy.' . . . However, . . . the parties may stipulate to the underlying facts that would aid in determining nondischargeability. . . . It appears . . . that when the debtor admits to the facts that would establish fraud, he or she is, in essence, stipulating to the facts required to determine nondischargeability. Debtor is not, however, simply agreeing to waive his or her right to a discharge to settle a case. Debtor is instead admitting the facts that establish the fraud and such a stipulation is given preclusive effect. The Bankruptcy Court must thus determine whether there is a proper stipulation to the underlying facts or whether the settlement provides a bare and impermissible waiver of discharge.").
In re Dyer, No. 14-11321, 2015 WL 430288, at *2-*3 (Bankr. W.D. La. Jan. 30, 2015) (Norman) (Unfair discrimination to separately classify student loan for more favorable treatment than other unsecured debts; separate classification is not saved by § 1322(b)(5). "Several reported decisions have allowed the separate classification of student loans and some have cited 11 U.S.C. § 1322(b)(5) as an acceptable special treatment for student loans . . . . [T]he vast majority of cases have held that it is unfair discrimination to separately classify education loans for more favorable treatment. . . . 11 U.S.C. [§] 1322(b)(1) and 11 U.S.C. § 1322(b)(5) must be read in conjunction with one another without creating the type of conflict that could justify the Court disregarding § 1322(b)(1)'s limiting language. 11 U.S.C. § 1322(b)(1) does nothing more than place a fairness limitation upon the classification and treatment of long-term unsecured debts . . . . The Court finds that the proposed plan violates the prohibition against unfair discrimination specifically that it proposes a less than 1% distribution to general unsecured creditors and a distribution to two student loan lenders of 23% and 62% respectfully [sic].").
In re Osorio, 522 B.R. 70, 77-82 (Bankr. D.N.J. Dec. 8, 2014) (Altenburg) (Unfair discrimination for debtor with CMI less than applicable median family income to pay municipal court fines in full and nothing to other unsecured creditors—notwithstanding threat of incarceration. Plan also fails § 1325(b) test because some unsecured creditors but not others would receive distributions of projected disposable income during applicable commitment period. The solution is to pay unsecured creditors pro rata during the applicable commitment period, then the debtor can pay fines in full thereafter. "Debtors argue that if the Municipal Court Fines are not separately classified, the Debtors will be subject to incarceration and presumably, their plans will fail. . . . [W]hile incarceration is a possibility—it is not mandatory. . . . [S]everal other courts have concluded that the threat of incarceration alone is not sufficient for a separate classification in a chapter 13 plan. . . . [T]he proposed discrimination based upon the Debtors' possible incarceration alone is not a reasonable basis to support their arguments that the discrimination substantially enhances or is necessary to the feasibility of their plans. . . . [T]he extent of the discrimination proposed by the Debtors is entirely unacceptable and unfair. They propose to pay the Municipal Court Fines in full and absolutely nothing to the remaining general unsecured creditors. Such a disparity, on its face, constitutes unfair discrimination. . . . [T]he proposed plans would in effect force the other general unsecured creditors to pay the price for the Debtors' alleged wrongdoing. . . . Section 1325(b)(1)(B) . . . requires payments from a debtor's projected disposable income during the applicable commitment period to unsecured creditors. It certainly does not allow payments to one class of general unsecured claims while ignoring payments to another class of general unsecured claims during the applicable commitment period. This could not have been the intent of Congress or the purpose of Section 1322(b)(1). . . . [T]he Debtors' plans propose to start to pay the Municipal Court Fines during the applicable commitment period without paying anything to the remaining general unsecured claims during that same period. This violates Section 1325(b)(1)(B) . . . . If the Debtors were to propose plans which provided for pro rata payments of the Municipal Court Fines and the remaining general unsecured claims during the applicable commitment [period] and then, after expiration of the applicable commitment period, they were to propose to pay the Municipal Court Fines in full, Section 1325(b)(1)(B) would not be violated. More importantly, such discrimination would not offend the concept of fairness under Section 1322(b)(1).").
In re Jordahl, 516 B.R. 573, 577-78 (Bankr. D. Minn. Aug. 27, 2014) (Sanberg) (Plan that separately classified student loan for 52% payment directly by debtor with interest as long-term debt unfairly discriminated when other unsecured creditors would receive less than 11%. "Nothing in § 1322(b)(5) excludes the application of § 1322(b)(1). Rather, subsection (b)(5) has specific language excluding subsection (b)(2). If Congress wanted § 1322(b)(1) to also not apply to classifications under § 1322(b)(5), it would have said so. . . . [R]eading the two provisions in conjunction with each other furthers the bankruptcy code's goal of balancing the rights of creditors to equal treatment with the rights of debtors to a fresh start. . . . Debtors may use § 1322(b)(5) to cure and maintain direct payments on long-term debt, but they may not unfairly discriminate against other unsecured creditors. . . . [N]ondischargeability by itself is not a reasonable basis for discrimination . . . . [D]ebtor needs to provide evidence of 'significant economic harm other than the accrual of interest and a large nondischargeable debt at the end of the [p]lan term' to prove a reasonable basis for discrimination. . . . Here, . . . debtors fail to provide any evidence of significant economic harms besides the potential for accrued interest and fees. . . . A debtor's interest in a 'fresh start' is not a sufficient basis to justify discrimination under § 1322(b)(1) by itself, rather, the interests of creditors must also be considered.").
In re Knowles, 501 B.R. 409, 421, 422 (Bankr. D. Kan. Nov. 4, 2013) (Karlin) (Adopting test in Bentley v. Boyajian (In re Bentley), 266 B.R. 229 (B.A.P. 1st Cir. Sept. 1, 2001) (Boroff, Feeney, Kenner) (per curiam), "direct payment to the student loan creditor of ongoing contractual payments does not constitute unfair discrimination under § 1322(b)(1). . . . Debtors are contributing this excess amount to the student loan debt only from funds not required by the Code to be committed to the plan. As stated by Bentley, '[w]hen a plan prescribes different treatment for two classes but, despite the differences, offers to each class benefits and burdens that are equivalent to those it would receive at the baseline, then the discrimination is fair.'. . . Debtors do not unfairly discriminate by devoting their discretionary income to repayment of those loans." However, separate classification of Kansas Department of Labor for full payment of claim for overpayment of unemployment compensation while paying nothing to general unsecured creditors was unfair discrimination. KDOL debt did not have priority and was dischargeable. No evidence "demonstrate[d] it was more likely than not that failure to pay 100% of that debt would impair their fresh start. . . . [T]he proposed discrimination merely 'alters the allocation of benefits and burdens to the detriment of one class,' and the discrimination is, therefore, unfair under § 1322(b)(1).").
In re Brown, 500 B.R. 255, 265-68 (Bankr. S.D. Ga. Sept. 6, 2013) (Barrett) (Plan does not unfairly discriminate or violate § 1322(b)(10) that separately classifies long-term student loans for maintenance of payments by direct payment that includes interest. Debtor owed $100,000 in student loans and plan proposed to maintain monthly payments directly by the debtor including 6% interest component. "[S]tudent loan separate classification must undergo the unfair discrimination analysis. . . . Requiring the separate student loan classification to be scrutinized for unfair discrimination under § 1322(b)(1) allows § 1322(b)(1) and (b)(5) to be read in a consistent manner. The statute allows for discrimination, just not unfair discrimination. . . . Under the [Mickelson v. Leser (In re Leser), 939 F.2d 669 (8th Cir. Sept. 17, 1991) (Bowman, Heaney, Dumbauld)/AMFAC Distribution Corp. v. Wolff (In re Wolff), 22 B.R. 510 (B.A.P. 9th Cir. June 29, 1982) (Hughes, Katz, George),] test . . . the discrimination has a reasonable basis in that it is a long term non-dischargeable debt and § 1322(b)(5) allows for this discrimination by allowing the cure and maintenance of long-term unsecured debt. . . . Debtor . . . could carry out a plan without the discrimination, however, . . . her fresh start would be severely hampered. . . . [I]f the Trustee's objections are sustained, Debtor would pay . . . an approximate 16% dividend as opposed to the 1% dividend proposed in her plan. The student loan debt is approximately 78% of her unsecured debt. The spread of 1%-17% is significant, but it is directly related to the rationale for the discrimination of preserving the Debtor's fresh start and is not unfair. . . . The payment of interest is a requirement for a debtor to be able to 'cure and maintain' payments under § 1322(b)(5). . . . '[I]f the Trustee is correct that section 1322(b)(10) should be considered an exception to section 1322(b)(5), it is an exception that swallows the rule. . . . [I]t would be impossible for a debtor to pay interest on a long-term debt as part of a cure and maintenance of that debt under section 1322(b)(5), even if the debt is not nondischargeable under any provision of section 523(a).' . . . I find § 1322(b)(1), (b)(5) and (b)(10) can be read together . . . . While § 1322(b)(5) allows interest on secured and unsecured long term debt, § 1322(b)(10) restricts interest payments on non-dischargeable unsecured debts that are not eligible for cure and maintenance under § 1322(b)(5), such as debts that are non-dischargeable due to a debtor's fraud. . . . This interpretation harmonizes the two provisions without preventing a debtor from fully utilizing § 1322(b)(5) to cure and maintain payments on long term non-dischargeable debt, a key component to a debtor's fresh start.").
In re Precise, 501 B.R. 67, 72-75 (Bankr. E.D. Pa. June 24, 2013) (Fox) (Direct payment of 86% of nondischargeable student loan while paying less than 8.4% of other unsecured claims is unfair discrimination and violates § 1322(b)(10). "[S]ection 1322(b)(1) does apply to plans that provide for the cure and maintenance of longterm [sic] unsecured debts, such as student loans . . . . Ms. Precise has no net monthly income that she is not obligated to use to fund her chapter 13 plan. . . . [T]here is no 'voluntary' payment to the student loan creditor using funds not included as projected disposable income. . . . [T]he debtor's proposed plan would, if approved, provide for, at least, an 86 percent dividend to ECMC, while all other general unsecured creditors would receive no more than 8.4 percent . . . . [A]s the debtor's obligation to ECMC is nondischargeable under section 1328(a), she is not authorized to pay interest to this creditor unless other creditors are paid in full. . . . [I]n addition to unfairly discriminating under section 1322(b)(1), the debtor's proposed plan violates section 1322(b)(10) and cannot be approved.").
In re Towler, 493 B.R. 239 (Bankr. D. Colo. May 28, 2013) (Brown) (That claim for reimbursement of overpayment of unemployment benefits was nondischargeable is not sufficient basis for separate classification or preferential treatment. Fairness of discrimination must be judged from perspective of general unsecureds.).
In re Kubeczko, No. 12-13766 HRT, 2012 WL 2685115 (Bankr. D. Colo. July 6, 2012) (Tallman) (Separate classification of student loan for direct payment as long-term debt unfairly discriminates and violates § 1322(b)(10) when effect is to pay interest to student loan creditor and plan would pay 47% of student loan while other unsecureds get less than 1%.).
In re Vandenberg, No. 09-bk-23387, 2012 WL 1854298, at *6-*7 (Bankr. D. Ariz. May 21, 2012) (Curley) (Applying factors from AMFAC Distribution Corp. v. Wolff (In re Wolff), 22 B.R. 510 (B.A.P. 9th Cir. June 29, 1982) (Hughes, Katz, George), stay denied pending appeal of denial of confirmation of plan that would unfairly discriminate by paying student loans directly in full and de minimis amount to other unsecured creditors. "The discrimination does not have a reasonable basis. . . . [T]he Debtor supports her discrimination by stating that she has made a 'lifestyle choice' to pay her student loans in full, with a de minim[i]s payment to creditors of the same priority. . . . [A] 'lifestyle choice' is not a basis to discriminate . . . . The Debtor is able to carry out the plan without discrimination. . . . [T]he Debtor may place all of her general unsecured claims, including her student loans, in one class, and pay a percentage of the claims of that class over the duration of her plan. Although the Debtor will not pay her student loans in full, over the duration of her plan, when she receives her discharge, she may resume payments on her student loans which are nondischargeable debts. . . . The discrimination is not proposed in good faith. The Debtor only focused on her 'lifestyle choice' to pay her student loans in full . . . . The Debtor has not proceeded in good faith. . . . The degree of discrimination is not directly related to the basis or rationale for the discrimination. The degree of discrimination, in this matter, is nearly complete. The Debtor proposes to pay 100 percent of her student loans under her plan, and pay roughly 2 percent of her other general unsecured claims.").
In re Renteria, No. 11-25510 MER, 2012 WL 1439104 (Bankr. D. Colo. Apr. 26, 2012) (Romero) (Separate classification of student loan for 64% payment "outside" plan unfairly discriminates when general unsecured creditors would receive 1% and could be paid 12% without separate classification.).
In re Zeigafuse, No. 11-20854, 2012 WL 1155680, at *5 (Bankr. D. Wyo. Apr. 5, 2012) (McNiff) (Separate classification of continuing payment of long-term student loan "outside" plan unfairly discriminates when student loan creditor will receive 21% and general unsecured creditors only 1.2%; level payment plan would pay all unsecured creditors 19%. "This court . . . joins the majority view holding that §§ 1322(b)(1) and 1322(b)(5) must be read in conjunction with one another." Applying the "four step test," the "balancing test" and the "baseline test," debtors failed to show a reasonable basis for the discrimination, debtors presented no evidence whether they could carry out their plan without the discrimination, Congress provided no priority of payment to student loans in Chapter 13 cases and debtors proposed no voluntary contributions to "square up" the disproportionate distribution.).
In re Pracht, 464 B.R. 486, 490-92 (Bankr. M.D. Ga. Jan. 10, 2012) (Smith) (Not unfair discrimination to separately classify student loan for continuing payments that will total $30,330.84 when other unsecured claims will receive only $15,660; continuing payment of student loan will permit debtor to realize loan forgiveness of approximately $50,000. Debtor was a school teacher with student loans totaling $115,934.98. Debtor was eligible for "public service loan forgiveness" program. If debtor made 120 consecutive monthly payments at a negotiated amount, balance remaining of approximately $50,000 would be forgiven. Plan proposed to separately classify the student loan debt for payment of $532.12 per month. Level payment of all unsecureds would increase distribution to general unsecured creditors by approximately $5,000. "[S]ection 1322(b)(5) does not 'trump' (b)(1). Rather, payments on a long-term debt under (b)(5) will not be permissible if the payments discriminate unfairly against the other unsecured claims in violation of (b)(1). . . . The Eleventh Circuit has not addressed the standards to be applied in determining whether a plan 'discriminates unfairly'. . . . [T]his Court can find no compelling reason why it should accept or reject any one of the many tests which have been developed by other courts. . . . [T]his determination must be made in light of the purposes of the Bankruptcy Code. . . . [A]llowing the debtor to separately classify and pay the student loan debt more than the other unsecured claims will allow the debtor to participate in the Public Service Loan Forgiveness program and thereby give her the chance to write off approximately $50,000 of the debt which would otherwise remain nondischargeable. Accordingly, allowing her to discriminate in favor of the student loan debt advances the goal of the debtor's fresh start. . . . [T]he cost of this discrimination to the creditors holding the other unsecured claims is the difference between a 15 percent and 20 percent distribution, or a total of only approximately $5,000. . . . [I]n light of this small cost to the creditors holding the other unsecured claims, allowing the debtor to proceed as proposed is a fair balance of the goals of the Bankruptcy Code.").
In re King, 460 B.R. 708, 712-13 (Bankr. N.D. Tex. Sept. 23, 2011) (Lynn) (It is not unfair discrimination to favorably classify student loans when all projected disposable income is paid to other unsecured creditors and student loan debt is paid from discretionary income not captured by § 1325(b). Plan provided that student loan creditors were separately classified to receive "direct payments" while non-student loan creditors shared pro rata in projected disposable income showing on Official Form B22C. Student loan creditors would be paid a greater percentage than non-student loan creditors, but non-student loan creditors would receive more than if all creditors shared distributions by trustee. "[A] plan does not discriminate unfairly if the class discriminated against receives no less than it would have received if there were no discrimination . . . . [A]s long as the class discriminated against receives its fair share of the [Unsecured Creditors' Pool], the discrimination is not unfair, and not in violation of section 1322(b)(1). After all, the Code requires only that a debtor pay the full amount of the UCP. Where, as here, the Plan so provides and otherwise meets the requirements of section 1325, the court is required to confirm the Plan . . . . If a debtor chooses to contribute income in addition to the mandatory contributions, then discrimination in the distribution of that amount does not diminish the return to other creditors and is not unfair. . . . The method of calculating projected disposable income under the current version of section 1325(b) leaves Debtors with income in excess of what they are required to contribute, allowing them to commit that amount to student loan creditors without diminishing the amount to which other unsecured creditors are entitled. . . . [T]he result is that the class of non-student loan creditors . . . actually receives a higher return under the Plan than it would if there were no discrimination. Under the Plan, the entire UCP is committed to non-student loan creditors. If Debtors chose not to contribute income in excess of their required contributions . . . , then each of the unsecured creditors (both student loan and non-student loan) would receive a pro rata portion of the UCP, diminishing the return to non-student loan creditors.").
In re Mason, 456 B.R. 245, 252 (Bankr. N.D. W. Va. June 3, 2011) (Flatley) (Separate classification of student loan debts may be justified, since Congress expressly favored student loan debts with discharge exception, but further hearing was necessary for debtor to explain basis for 72% distribution to student loan creditor while paying 8% to general unsecureds. "In the absence of an articulated reason as to why this discriminatory treatment is being proposed, the court cannot discern whether the proposed treatment is prohibited.").
In re Abaunza, 452 B.R. 866, 876 (Bankr. S.D. Fla. June 2, 2011) (Isicoff) (When debtors have committed all projected disposable income to unsecured creditors, it is not unfair discrimination to separately classify student loan for direct payments by debtors from "discretionary income" that is not captured by the projected disposable income test. Payment by debtors directly to student loan creditor is a separate classification for § 1322(b)(1) purposes. Prior to BAPCPA, a majority of courts applied some variation of multi-factor test such as the test in Mickelson v. Leser (In re Leser), 939 F.2d 669 (8th Cir. Sept. 17, 1991) (Bowman, Heaney, Dumbauld). After BAPCPA, courts have applied different tests to determine whether a separate classification of unsecured creditors unfairly discriminates. "[W]here the sole allegation for unfair discrimination is payment of a separately classified creditor from an above-median debtor's 'discretionary funds,' the plan does not discriminate unfairly. Congress has defined 'fair' for above-median debtors as PDI. In other words, for purposes of determining whether the chapter 13 plan of an above-median debtor unfairly discriminates between creditors, so long as all of a debtor's PDI is being used to fund a chapter 13 plan, what the debtor chooses to do with his or her discretionary income . . . is within the debtor's discretion.").
In re Nealey, No. 10-10606-SSM, 2011 WL 1485541 (Bankr. E.D. Va. Apr. 19, 2011) (Mitchell) (Nondischargeability of criminal restitution claim did not justify separate classification for 100% payment when other unsecured creditors would receive nothing. Separate classification of restitution claims may be permissible under some circumstances, but not when it would prejudice distribution to which general unsecureds would otherwise be entitled.).
In re Potgieter, 436 B.R. 739 (Bankr. M.D. Fla. Apr. 14, 2010) (Paskay) (Not unfair discrimination to pay regular contract payments on student loan debt while paying other unsecured creditors 100%. Although student loan creditor would receive less than 100% distribution during plan, amount remaining would be nondischargeable long-term debt under § 1322(b)(5).).
In re Sharp, 415 B.R. 803, 807–13 (Bankr. D. Colo. Oct. 6, 2009) (Brown) (Direct payments by debtors to student loan creditors in addition to pro rata payments by trustee is a classification for purposes of § 1322(b)(1) but is not unfair discrimination when debtors are paying unsecured creditors all to which they are entitled by projected disposable income test in § 1325(b). In consolidated cases, plans proposed to pay all projected disposable income for 60 months to trustee and in addition, debtors would make "direct" payments to student loan creditors from income not needed to satisfy projected disposable income test. Trustee argued that plans unfairly discriminated in favor of student loan creditors. "Courts have recognized that a payment to a creditor 'outside the plan' can amount to an implicit classification, even though not specifically referenced in the plan. Thus, even though the Debtors' plans in these cases do not specifically provide for their student loan creditors to be paid in a separate class, Debtors' payments to those creditors outside their plans could be considered a classification for purposes of § 1322(b)(1). . . . BAPCPA impacts the analysis, at least in some cases, because BAPCPA altered the calculation of 'projected disposable income' which an above-median income debtor must commit to a plan . . . and added a requirement that a debtor pay his or her PDI to unsecured creditors. PDI is essentially the 'pot' that a debtor must distribute to unsecured creditors in a manner that does not unfairly discriminate. . . . Each of the Debtors has sufficient actual income, after committing PDI to the plan, to make full monthly payments on their student loan debts. The payment to the student loan creditor does not lessen any of the Debtors' PDI payment. . . . Debtors' payments 'outside the plan' are discretionary. . . . If Debtors did not pay the discretionary funds to student loan creditors, there is nothing in the Code that requires them to pay the funds into their plans . . . . Under these unique circumstances, the Court concludes that the discretionary payments to student loan creditors are not unfairly discriminatory since [general unsecured creditors] are receiving all they are entitled to receive under § 1325(b). To hold otherwise would subvert the disposable income test in § 1325(b) by requiring a debtor to pay more than PDI to unsecured creditors. The Court will not use the unfair discrimination test as a way around the new PDI calculation imposed by BAPCPA. . . . Debtors are proposing . . . equal distribution of their respective PDI among all unsecured creditors. There is no discrimination, and hence no unfair discrimination, between claimants holding dischargeable and nondischargeable unsecured claims. Pro rata, or proportionate distribution, by definition does not discriminate.").
In re Kruse, 406 B.R. 833, 839-40 (Bankr. N.D. Iowa June 11, 2009) (Kilburg) (Applying four-part test in Mickelson v. Leser (In re Leser), 939 F.2d 669 (8th Cir. 1991), separate classification of student loan for more favorable treatment fails unfair discrimination test when debtor could propose a plan without separate classification that would increase the dividend to general unsecured creditors while reducing distributions to student loan creditor only marginally. "The majority position holds that plans providing full payment of student loan obligations under § 1322(b)(5) must also undergo unfair discrimination analysis because nondischargeability, by itself, is insufficient reason to permit discrimination against other unsecured claims. . . . Debtor can carry out a plan without separately classifying the student loan . . . . Including the student loan debt with other unsecured debt would greatly increase the dividend to other creditors.").
In re Martellaro, 404 B.R. 548, 555-59 (Bankr. D. Mont. Dec. 5, 2008) (Kirscher) (Separate classification of student loan debt for continuing payment unfairly discriminates against other unsecured claims; nothing in BAPCPA changes that result. Applying four-factor test from Amfac Distribution Corp. v. Wolff (In re Wolff), 22 B.R. 510 (B.A.P. 9th Cir. 1982), and Labib-Kiyarash v. McDonald (In re Labib-Kiyarash), 271 B.R. 189 (B.A.P. 9th Cir. 2001): "BAPCPA did not amend a single word of § 1322(b)(1) or § 1322(b)(5) . . . . [T]he rule . . . stated in . . . Labib-Kiyarash[] continue[s] to apply post-BAPCPA . . . . A debtor may use § 1322(b)(5) to maintain long-term student loan payments at the contract rate and cure any arrearage through the plan, provided that the plan satisfies the Wolff test for unfair discrimination. . . . The nondischargeable nature of student loans is not, by itself, a reasonable basis for discrimination. . . . [The debtor] failed to offer any evidence that she would suffer significant economic harm other than the accrual of interest and a large nondischargeable debt at the end of the Plan term . . . . The record in the instant case is devoid of any evidence that the Debtor in the instant case was aware of or has applied for the [Income Contingent Repayment Plan], which would obviate the Debtor's only argument against paying her student loans through her Plan together with the other general unsecured claims.").
In re Orawsky, 387 B.R. 128 (Bankr. E.D. Pa. May 2, 2008) (Frank) (Applying four considerations from Bentley v. Boyajian (In re Bentley), 266 B.R. 229 (B.A.P. 1st Cir. 2001), when debtor has no projected disposable income, it is not unfair discrimination for plan to continue regular monthly payments on account of nondischargeable student loan; because unsecured creditors have no statutory entitlement to distributions under plan, although plan is discriminatory, it "places an additional benefit on the scales.").
In re Machado, 378 B.R. 14, 16-17 (Bankr. D. Mass. Nov. 6, 2007) (Somma) (Curing default and maintaining payments on long-term student loan does not unfairly discriminate when treating student loan the same as other unsecureds would only change dividend from 4.14% to 6.76%. "[T]he Debtor may employ cure and maintain treatment under Section 1322(b)(5) for her student loan debt given the occurrence of prepetition defaults and original loan maturity dates after the final Plan payment date. . . . Nonetheless, the treatment of student loan debt under Section 1322(b)(5) must not discriminate unfairly as against the Debtor's other unsecured debt. . . . Congress, by its exception of student loan obligations from discharge, has long made clear the legislative objective of student loan repayment. . . . [F]or debts whose terms extend beyond the period of a chapter 13 plan—often including, precisely because of their nondischargeability, student loan obligations—Congress has further expressly permitted a debtor to elect to cure and maintain that debt. . . . If she were to forego this option and pay an equal percentage to both student loan creditors and other nonpriority unsecured creditors, she would emerge from bankruptcy more deeply in arrears than she went into bankruptcy, a result that cannot be fair to her or consistent with the evident intent behind sections 523(a)(8) and 1322(b)(5). . . . [T]he financial differential resulting from the proposed discrimination is modest. . . . 6.76%, or . . . 4.14% . . . . I find no unfairness in this differential . . . . [N]o holder of a non-student loan unsecured claim has objected[.]" Payments to cure default on student loan debt must be made through the trustee and are subject to trustee's commission; maintenance payments can be paid directly to the student loan creditor and are not subject to trustee's percentage fee.).
In re Knight, 370 B.R. 429, 432-33 (Bankr. N.D. Ga. June 27, 2007) (Maintenance of payments on long-term, nondischargeable student loans is permitted by § 1322(b)(5) and is not inconsistent with requirement in § 1325(b)(1) that all projected disposable income be paid to unsecured creditors; because student loans are debts, Chapter 13 debtor with CMI greater than applicable median family income cannot account for maintenance of payments on long-term, nondischargeable student loans as a category of Other Necessary Expenses for § 707(b)(2)(A) purposes; maintenance of payments on long-term, nondischargeable student loan debt may be "special circumstance" for purposes of § 707(b)(2)(B) which would also survive unfair discrimination scrutiny under § 1322(b)(1) when separate treatment of student loans has de minimis effect on other unsecured creditors. Plan proposed to pay $455 per month to maintain payment on long-term, nondischargeable student loans and $400 per month for pro rata distribution to other unsecured creditors. Treatment of all unsecured creditors together would have increased the dividend from 43% to 48% for general unsecured creditors. "[T]he plan meets the requirement of § 1325(b)(1)(B) that all [projected disposable income] 'be applied to make payments to unsecured creditors under the plan.' . . . [T]he language in [§ 1325(b)(1)(B)] does not address the allocation of payments among various types of unsecured creditors. To the contrary, another provision, § 1322(b)(1), which permits classification of unsecured claims, governs the allocation issue. . . . Section 1322(b)(5) permits a plan to provide for the curing of defaults and the continuation of payments while the case is pending 'on any unsecured claim . . .' . . . . This provision, then, expressly authorizes separate classification and different treatment of long-term unsecured debt. For § 1322(b)(5) to have meaning with regard to a long-term unsecured debt, § 1325(b)(1)(B) must permit the use of [projected disposable income] to cure defaults and maintain payments on it. The increase in the amounts that unsecured creditors would receive over 60 months if the plan treated all unsecured creditors the same way is de minimis. Thus, unfair discrimination as a result of this expressly authorized type of classification does not appear to be an issue in this case.").
In re Webb, 370 B.R. 418, 423-26 (Bankr. N.D. Ga. Feb. 22, 2007) (Murphy) (Section 1322(b)(10) does not prohibit curing default and maintaining payments on long-term, nondischargeable student loan notwithstanding that effect of separate classification is to pay greater proportion of student loan with postpetition interest when other unsecured creditors are receiving 1% dividend; unfair discrimination factors in Mickelson v. Leser (In re Leser), 939 F.2d 669 (8th Cir. Sept. 17, 1991) (Bowman, Heaney, Dumbauld), favor fairness. "[B]ecause educational loans are nondischargeable, they accrue interest and other fees for any monthly contract payments not paid in full during the term of the plan. . . . [B]ecause Debtors cannot propose a feasible plan that will not leave them with a large accrued nondischargeable debt, this factor weighs in favor of confirmation. . . . [D]isallowing direct payments to the Student Loan Creditors, would result in payment to the other, dischargeable, unsecured creditors of only an additional .2% dividend, which is negligible. . . . [B]alancing the equities in the instant case supports confirmation.").
In re Gentry, No. 05-60728-RLJ 13, 2006 WL 6544156 (Bankr. N.D. Tex. June 12, 2006) (Jones) (Plan cannot separately classify tax claim for payment of postpetition interest under § 1322(b)(10) when only basis for separate classification is that tax debt is nondischargeable domestic support obligation and debtor failed to prove that tax debt was actually in the nature of alimony, maintenance or support for purposes of § 101(14A).).