Opinion
CASE NUMBER 03-17506-WHD
June 16, 2003
SUPPLEMENTAL ORDER TO ORDER CONFIRMING CHAPTER 13 PLAN
On June 5, 2003, this Court entered an Order confirming the Chapter 13 plan proposed by the Debtor in the above-captioned bankruptcy proceeding. The Debtor's plan proposed that:
The student loan claim of the U.S. Dept. of Education will be paid in full (100%) as a separate class of unsecured claim. All post-petition interest must be included in the claim filed by any holder of a claim of the type described in 11 U.S.C. § 523 (a)(8), and the holders of said claim shall be permanently barred from collecting any post-petition interest or asserting any claim against the debtor after he receives a discharge.
No creditor objected to confirmation of the Debtor's plan. Further, this provision of the Debtor's proposed plan was not brought to the Court's attention by either the Chapter 13 Trustee or any creditor. Consequently, upon recommendation of confirmation by the Chapter 13 Trustee, the Court entered a standard order confirming the Debtor's Chapter 13 plan.
It is settled law that post-petition interest on a student loan debt is non-dischargeable unless the debtor establishes that repayment of the interest would create an undue hardship upon the debtor. 11 U.S.C. § 523 (a)(8); see also Bruning v. United States, 376 U.S. 358 (1964) (holder of a nondischargeable debt may collect post-petition interest from the debtor personally); Burns v. United States (In re Burns), 887 F.2d 1541 (11th Cir. 1989) (post-petition interest on a nondischargeable debt is itself nondischargeable); In re Shelbayah, 165 B.R. 332 (Bankr. N.D. Ga. 1994) (Massey, J.). The above-mentioned plan provision, to the extent that its intent and effect is to discharge post-petition student loan interest, contravenes § 523(a)(8) of the Bankruptcy Code and should not have been included in the Debtor's Chapter 13 Plan.
Accordingly, it is hereby ORDERED that the confirmation order is MODIFIED and AMENDED to delete the second sentence of the above-mentioned provision.