Central District Consumer Bankruptcy Attorney's Association

Any attempt to carve out a separate payment outside the plan would be deemed a special treatment of a class 5 creditor (to the detriment of other Class 5 creditors). The normal treatment is that student loans get paid through plan and after plan completion, separate arrangements must be made for balance.

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Newbie question: I'm preparing a Chapter 13 plan for a client who has student loans which extend past the 5 years of the plan. I've reviewed a couple treatises on the issue and I'm still confused as to what I can do. I would like to lower the monthly plan payment because the income/expense numbers are tight. In Central District, can I have the monthly payments paid outside the plan (as I am doing with the mortgage) or does it need to be paid with other unsecured debt in the plan? If it is paid with other unsecured debt in the plan, does the entire debt need to be paid through the plan or can the plan call for regular payments which will then continue after the plan ends? Finally, if the entire amount is paid through the plan, would I keep the same interest rate or could I use a lower one? Thanks for the help.
Cameron Totten

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My Partner Sharon Hughes has the following question while she is
awaiting approval to post herself:
Recommendations regarding scheduling payment of student loan through
chapter 13 plan. What is the best way to handle the default under the
loan agreement that occurs as a result of the plan only providing for
a partial monthly payment? Should debtor contact loan servicer to
request change in payment structue?
Simon J. Dunstan
HUGHES & DUNSTAN, LLP
Suite 1960
21650 Oxnard Street
Woodland Hills, California 91367

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