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 46 ©National Consumer Bankruptcy Rights Center CONSUMER BANKRUPTCY JOURNAL Fall 2016 National Association of Consumer Bankruptcy Attorneys