Part 2: Can you discriminate in a Ch 13 to pay 100% on codebt...
Posted: Sat Feb 13, 2010 11:05 pm
I just read a 9th Circuit BAP case called Hill (01-1043) that says you can discriminate as long as you meet the 3 elements under 1322(b)(1): consumer debt, consumer debt of the debtor, and there is an individual who is liable on such consumer debt with the debtor; and can show that the discrimination is not unfair under a multi-factor test.
The above wasn't exactly the holding of the case though that was in the discussion. This case had to do with a situation where the debtor alleged that she actually owed the debt on a few credit cards that were in the name of her mother. She then tried to classify these cards as codebts in her Chapter 13. The court said that the debtor has not proven that she meets the element that she is actually "liable with" her mother and therefore this was not a codebt under 1322(b)(1). Judge Russell, concurring, said that on remand the Debtor might be able to present facts to prove that she was a codebtor on the accounts.
I am wondering what would be sufficient proof that she was a codebtor? I have a similar situation. Debtor is not on the card, but she racked up 2/3 of the debt and can prove that she has been paying on it. From the creditor's standpoint, however, I don't think the creditor has any rights against her, so she may not meet the definition of being "liable with". My concern would be if I try to pay this creditor 100% through her plan and try to prove up that she really is jointly liable on the debt that I am going to incur objections from all the other unsecureds and the trustee.
Has anyone successfully dealt with this situation?
Holly
holly@roarklawoffices.com
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> Can you discriminate in a Chapter 13 to pay 100% of an unsecured debt that has a non-filing co-debtor, while paying the other unsecureds a pro rata share of whatever is left in the pot (less than 100%)?
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> This doesn't sound right, however, I could have sworn I read somewhere that it can be done.
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> I would appreciate your insights on this issue.
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> Holly Roark
> holly@...
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