Consumer Bankruptcy Journal Fall 2016 | Page 46
NCBRC CASES IN REVIEW
Chapter 13—Confirmation of plan—Effect on trustee: A Chapter 13 trustee is not
required to file an objection to an unsecured claim prior to entry of the order of plan
confirmation. In re Clark, 551 B.R. 910 (Bankr. N.D. Okla. June 21, 2016) (case no.
4:15-bk-11133).
Chapter 13—Dismissal of case under Code § 1307(c): A bankruptcy court has
discretion to allow a Chapter 13 debtor to cure a default under the debtor's confirmed
plan beyond the 60-month maximum term of a Chapter 13 plan. See 1 W. Homer
Drake, Jr., et al., Chapter 13 Practice and Procedure, § 11:15 at 1131 (2d ed. 2015)
(“[W]hen a debtor is close to completing her plan payments and needs a reasonable
additional time to do so, courts have permitted the debtor to cure the defaults and
consummate the plan. The reasoning is that the five-year restriction applies to the
scheduling of the payments in the confirmed plan and does not prohibit cure of those
payments outside the scheduled time ....”). Germeraad v. Powers, --- F.3d ----, 2016 WL
3443342 (7th Cir. June 23, 2016) (case no. 15-3237).
Chapter 13—Disposition of funds held by trustee—Upon dismissal of case:
Harris v. Viegelahn, ––– U.S. ––––, 135 S.Ct. 1829, 191 L.Ed.2d 783 (2015) governs a
Chapter 13 case that is dismissed following confirmation of a plan, and the Chapter
13 trustee must return to the debtor, rather than distribute to creditors, undisbursed
plan payments still in the trustee's hands. In re Bateson, 551 B.R. 807 (Bankr. E.D.
Mich. June 23, 2016) (case no. 2:13-bk-55057).
Dischargeability of debt—Student loan debt under Code § 523(a)(8)—Status of
obligation as educational loan: A debt owed to a foreign and presumably for-profit
university (the American University of Antigua) not accredited by the United States
did not come within the exception to discharge in Code § 523(a)(8), even though the
debtor's student loan accounts were now serviced by entities in the United States. In re
Meyer, 2016 WL 3251622 (Bankr. N.D. Ohio June 6, 2016) (case no. 1:15-bk-13193).
Dischargeability of debt—Student loan debt under Code § 523(a)(8)—Undue
hardship: The 35-year-old debtor, a single mother of three dependent children,
established, under the “totality of the circumstances” test, that excepting her $27,000
in student loans from discharge would impose an undue hardship on her and her
children. The debtor's financial situation was not likely to improve, her expenses were
minimal, and the availability of income-based repayment programs did not outweigh
the burdens that those programs would impose, especially considering that the debtor,
who had never made more than $25,000 per year, would probably never be able to
make substantial payments on her loans. While the debtor had never made a payment
on any of her student loans, the loans had always been in deferment or forbearance,
so that the debtor has never been delinquent on the loans. In re Fern, --- B.R. ----, 2016
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CONSUMER BANKRUPTCY JOURNAL
Fall 2016
National Association of Consumer Bankruptcy Attorneys