Student Loans in Chapter 13: Robin Weiner

Robin Weiner, Broward and Palm Beach County chapter 13 bankruptcy trustee, clarified her position on separate classifications of student loans in chapter 13 during confirmation hearings this past week. Fort Lauderdale bankruptcy attorneys and Broward County bankruptcy attorneys as well as Palm Beach bankruptcy attorneys would find this information quite useful.

Recall from prior posts that student loans cannot be separately classified in chapter 13 if this would unfairly discriminate against other unsecured creditors. A chapter 13 plan must provide that unsecured creditors receive at a minimum the greater of the liquidation value of the debtor’s non-exempt assets and the amount required under the means test. According to Robin Weiner, if the debtor can pay this amount, then the debtor can in addition propose a plan to make the regular payments on the student loans.

For example, if the means test shows the debtor must pay $300 per month, times 60 months for a total of $18,000; and if the liquidation test shows that the debtor has $20,000 in non-exempt assets that would have to be surrendered in a chapter 7, then the debtor’s plan must pay at least $20,000 plus the trustee’s 10% fee. Robin Weiner would not object if the debtor’s plan provides for an additional payment of the regular student loan payment.

Please be aware that I can still envision a creditor’s argument that would not permit this method of classification. On the other hand, there could be other plans that also could be proposed that would not unfairly discriminate.



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