Bentley v. Boyajian (In re Bentley)
United States Bankruptcy Appellate Panel for the First Circuit
266 B.R. 229 (2001)
- Written by Abby Roughton, JD
Facts
William and Kara Bentley (debtors) filed for Chapter 13 bankruptcy. The Bentleys’ Chapter 13 plan divided their nonpriority unsecured creditors into two classes. The first class consisted of creditors who held student-loan obligations that were excepted from discharge in Chapter 13. The plan proposed to pay the student-loan claims in full. The second class consisted of all other unsecured creditors, who held claims totaling roughly $55,000. The plan proposed to pay those creditors a total of $2,000 to be shared on a pro rata basis. To satisfy their plan obligations, the Bentleys proposed to devote the minimum amount of property required by the Bankruptcy Code: their projected disposable income for a three-year period. Chapter 13 trustee John Boyajian objected to the Bentleys’ plan, asserting that the plan unfairly discriminated against the class of general unsecured creditors. The bankruptcy court denied confirmation of the Bentleys’ plan, finding that the Bentleys’ plan violated 11 U.S.C. § 1322(b)(1) because the student loans’ nondischargeability did not justify giving the student-loan creditors preferential treatment over other unsecured creditors. The Bentleys appealed.
Rule of Law
Issue
Holding and Reasoning (Per curiam)
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