Opinion ID: 2967431
Heading Depth: 3
Heading Rank: 2

Heading: The Lawrences

Text: On May 4, 1993, David and Elizabeth Lawrence filed a Chapter 13 bankruptcy petition. Listed in their schedules was student loan debt consisting of two promissory notes. These notes were held by American Student Loan Assistance (ASLA) and Consumers Bank and were subsequently transferred to the guarantor, ECMC, which now holds the notes. In their Chapter 13 plan, which was confirmed July 13, 1993, the Lawrences provided for their student loans as follows: The debtors shall pay 100% of the following student loans inside their Chapter 13 Plan, as they are nondischargeable IN RE KIELISCH 5 in Chapter 7; American Student Loan Assistance = $2,851.00. Consumer’s Bank = $2,818.00. (J.A. at 187.) These amounts included only principal and prepetition interest. The Lawrences’ Chapter 13 trustee thereafter began making payments to ASLA according to the plan.2 The trustee paid the entire $2,851.00 to ASLA as provided in the plan and proof of claim, and, on October 16, 1998, the bankruptcy court discharged the Lawrences. The case was closed on October 23, 1998, but the bankruptcy court reopened the case on November 16, 1999, at the request of the Lawrences, to determine the dischargeability of their debt to ECMC as assignee of the ASLA and Consumers Bank notes. After a hearing, the bankruptcy court held that although ECMC was entitled to recover from the Lawrences accrued post-petition interest on its claims, 11 U.S.C.A. § 502 barred it from applying payments made under the Chapter 13 plan to postpetition interest. The bankruptcy court left it to the parties to determine to what extent ECMC’s claim had been satisfied, based upon the court’s ruling. On March 27, 2000, ECMC appealed to the district court, which affirmed the bankruptcy court’s decision. After ECMC appealed the orders relating to both the Kielisches and Lawrences, we consolidated both cases for appeal.3