§ 73.2     What Claims Are Priority Claims?
Cite as:    Keith M. Lundin, Lundin On Chapter 13, § 73.2, at ¶ ____, LundinOnChapter13.com (last visited __________).
[1]

The claims entitled to priority and full payment in a Chapter 13 plan under § 1322(a)(2) have undergone much statutory change over the years. This section deals primarily with priority claims prior to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA).1 This pre-BAPCPA discussion remains relevant because many of the BAPCPA changes to priority claims were additions to existing law.

[2]

The reference to § 507 in 11 U.S.C. § 1322(a)(2) requires Chapter 13 debtors to pay in full (but generally without interest)2 all claims entitled to priority under § 507.3 In all Chapter 13 cases filed after 1994, priority claims include alimony, maintenance and support—now called “domestic support obligations”;4 wages, salaries or commissions up to the limits in § 507(a)(4);5 and unsecured claims for taxes described in § 507(a)(8).6

[3]

Problems of statutory interpretation arise with respect to administrative expenses in Chapter 13 cases. Section 1322(a)(2) requires a Chapter 13 plan to provide for full payment “of all claims entitled to priority under § 507.”7 Section 507(a) recites that “[t]he following expenses and claims have priority in the following order: (1) First . . . [a]llowed unsecured claims for domestic support obligations8 . . . . (2) Second, administrative expenses allowed under section 503(b) of this title.”9 The Code makes a distinction between expenses and claims for purposes of the priorities in § 507(a).10 Unfortunately, § 1322(a)(2) only requires full payment in a Chapter 13 case of priority claims. There is no mention in § 1322(a)(2) of administrative expenses entitled to priority under § 507(a)(2).

[4]

A strict statutory constructionist might say that the reference in § 1322(a)(2) to claims excludes from the full-payment requirement items listed in § 507 that are not claims. Arguably, expenses of administration such as attorneys’ fees allowed under § 330 or taxes incurred by the estate described in § 503(b) need not be provided for in full to accomplish confirmation of a plan under § 1322(a)(2).

[5]

But many reported cases do not treat administrative expenses in this way. Instead, the cases almost invariably speak of administrative expenses as priority claims.11 Most Chapter 13 plans treat attorneys’ fees as priority claims entitled to full payment notwithstanding the absence of a reference to administrative expenses in § 1322(a)(2). It is theoretically possible to confirm a plan that does not provide for full payment of attorneys’ fees and other administrative expenses, but it will rarely if ever make any sense to do so.

[6]

That administrative expenses technically are not priority claims makes some difference when the plan ends without paying all administrative expenses in full. For example, attorneys’ fees allowed under § 330, but not paid during the Chapter 13 case, probably are not discharged, and some courts have held that allowed but unpaid fees can be collected from the debtor personally.12

[7]

Filing fees fall into the same analysis. Filing fees are granted a second priority by § 507(a)(2).13 If filing fees are considered to be “claims entitled to priority under section 507,” then filing fees are priority claims entitled to full payment in deferred cash payments under § 1322(a)(2).14

[8]

Maybe the most significant consequence of the distinction between administrative expenses and priority claims is the payment of postpetition interest. Detailed elsewhere,15 priority claims are entitled to full payment in a Chapter 13 plan under § 1322(a)(2) but generally without postpetition interest. If administrative expenses are properly classified as priority claims for purposes of the cross-reference in § 1322(a)(2), then administrative expenses are payable in a Chapter 13 plan without interest. If administrative expenses are not priority claims, then the holder of an administrative expense has an argument for better treatment than § 1322(a)(2) with respect to the payment of postpetition interest.

[9]

The issue becomes more acute in a Chapter 13 case because of the possibility that a postpetition debt will be a postpetition claim under § 1305, an administrative expense under § 507(a)(2) or both.16 Entitlement to postpetition interest could depend on which characterization applies. Characterization as an administrative expense, as a postpetition claim or as a priority claim changes how and when the creditor must assert its rights in the Chapter 13 case.17 This is a very difficult area of Chapter 13 practice, and the rules have not been well clarified in the case law. Postpetition taxes raise some of the most difficult questions.18

[10]

Maybe the best position for the debtor is to make provision in the plan for the treatment of administrative expenses, priority claims and postpetition claims. If the plan is specific with respect to the postpetition interest entitlements of each category, everyone avoids the problems of statutory construction evident in the reported cases.19

[11]

With two exceptions—administrative expenses under § 507(a)(2)20 and claims for death or personal injury resulting from drunk driving under § 507(a)(10)21—the claims entitled to priority and full payment in a Chapter 13 case are always unsecured claims.22 Sometimes to avoid paying postpetition interest, debtors have tried to (mis)characterize secured claims as priority claims. Secured claims cannot be forced into priority status.23 Attempting to force a nonpriority claim into § 507(a) also may provoke an objection to confirmation based on unfair discrimination in classification.24

[12]

The most significant priority claim in many Chapter 13 cases is now the first priority in § 507(a)(1)—domestic support obligations (DSOs). In 2005, BAPCPA broadened the scope of this priority by defining DSO in § 101(14A).25 Between 1994 and 2005, there was a somewhat less extensive seventh priority in § 507(a)(7) for alimony, maintenance and support.26 The history of this priority and its less-than-perfect relationship to the debts that are nondischargeable under § 523(a)(5) and (a)(15) is important to Chapter 13 practice.27

[13]

In 1994 Congress amended § 507 to add a new seventh priority for alimony, maintenance and support claims, described as follows:

(7) Seventh, allowed claims for debts to a spouse, former spouse, or child of the debtor, for alimony to, maintenance for or support of such spouse or child, in connection with a separation agreement, divorce decree or other order of a court of record, determination made in accordance with State or territorial law by a governmental unit, or property settlement agreement, but not to the extent that such debt—
(A) is assigned to another entity, voluntarily, by operation of law, or otherwise; or
(B) includes a liability designated as alimony, maintenance, or support, unless such liability is actually in the nature of alimony, maintenance or support.28
[14]

This priority for alimony, maintenance and support had many important effects in Chapter 13 cases. In Chapter 13 cases filed before October 22, 1994, there was no priority under § 507 for alimony, maintenance or support, and such claims were not entitled to full payment under § 1322(a)(2). In Chapter 13 cases filed after October 22, 1994, to accomplish confirmation, the plan had to provide for full payment of alimony, maintenance or support debts described in (former) § 507(a)(7). In cases filed on or after October 17, 2005, the plan must provide for full payment of DSO claims described in amended §§ 101(14A) and 507(a)(1).29 In March of 1995, the Judicial Conference of the United States promulgated a new Schedule E to Official Bankruptcy Form 630 requiring debtors to identify priority debts for alimony, maintenance and support. Schedule E has been amended to reflect the 2005 change to DSOs.

[15]

Beginning in 1994, the § 507(a)(7) priority required Chapter 13 debtors to separately classify alimony, maintenance and support for payment in full in all Chapter 13 cases in which the debtor was financially unable to pay all unsecured claim holders in full.31 The 1994 amendment made it easier for Chapter 13 debtors to win the argument that alimony, maintenance and support claims were appropriately dealt with through Chapter 13 plans and could be separately classified for full payment.32 Separate classification and full payment are the standard treatment for DSOs in plans after BAPCPA.33

[16]

The alimony, maintenance or support debts that were entitled to priority under former § 507(a)(7) and to full payment under § 1322(a)(2) were not exactly coextensive with the alimony, maintenance or support debts that were nondischargeable in a Chapter 13 case.34 Discussed in more detail elsewhere,35 debts to a spouse, former spouse or child for alimony, maintenance or support of the sort described in pre-BAPCPA § 523(a)(5) were not dischargeable in a Chapter 13 case. Before amendment in 2005, § 523(a)(5)(A) excluded from the exception to discharge debts “assigned to another entity, voluntarily, by operation of law, or otherwise (other than debts assigned pursuant to § 408(a)(3) of the Social Security Act, or any such debt which has been assigned to the Federal Government or to a State or any political subdivision of such State).”36 For priority purposes, pre-BAPCPA § 507(a)(7) more broadly excepted from the seventh priority any debt for alimony, maintenance or support that “is assigned to another entity, voluntarily, by operation of law or otherwise.”37 Alimony, maintenance or support debts assigned pursuant to the Social Security Act or assigned to a government were nondischargeable in a Chapter 13 case but were not entitled to the former seventh priority in § 507(a)(7)(A). The narrow subclass of alimony, maintenance or support claims that had been assigned pursuant to the Social Security Act or assigned to a government were not entitled to full payment in a Chapter 13 case under § 1322(a)(2) but were excepted from discharge.38

[17]

Pre-BAPCPA cases provide examples. In In re Gray,39 the bankruptcy court found in Alabama law that AFDC recipients were deemed to have assigned to the state “any support owed up to the amount of aid paid by the department to the recipient.” Accordingly, the portion of the state’s claim in a Chapter 13 case that was AFDC benefits paid to the debtor’s grandmother who had custody of the debtor’s children was assigned and could not be priority. However, the portion of the state’s claim that was child support arrearages owed directly to the grandmother was not assigned, retained its priority under (former) § 507(a)(7)(A) and was entitled to full payment under § 1322(a)(2). Similarly, in In re Blackstone,40 part of the county’s claim was assigned support and part of it wasn’t; priority status turned on this distinction:

[D]elinquent support obligations which were assigned to Orange County would be nondischargeable in chapter 13 under § 1328(a)(2) and § 523(a)(5)(A), but not entitled to treatment as priority claims under § 507(a)(7) and § 13[2]2(a)(2). To the extent that the claim was not assigned, and if the County simply acts as a collecting agency for the benefit of the ex-spouse or children, priority treatment would appear proper.41
[18]

It is not clear whether this lack of parallelism in the 1994 Code was intended,42 but it presented some problems for Chapter 13 debtors with alimony, maintenance or support debts that were assigned in a manner that defeated priority status but left the claims nondischargeable. In cases filed after the 1994 amendments and before October 17, 2005, the Chapter 13 debtor could confirm a plan that did not pay such claims in full. More likely, the debtor wanted to pay the claims in full during the plan to avoid being stuck with the balance after completion of payments to other creditors. But the debtor had a more difficult argument to justify separate classification for more favorable treatment of claims that were not entitled to priority.43 One pre-BAPCPA decision indicated that even assigned child support claims that failed the test for priority in former § 507(a)(7) were entitled to full payment in a Chapter 13 case.44

[19]

In one important respect, the priority for alimony, maintenance and support in pre-BAPCPA § 507(a)(7) was worded identically to the exception to discharge in § 523(a)(5): the debt had to be “actually in the nature of alimony, maintenance or support.”45 The identical language in (former) § 523(a)(5)(B) was an endless source of aggravation in nondischargeability litigation under other chapters of the Code.46 Chapter 13 debtors have litigated the nature of alimony, maintenance and support awards at or before confirmation to determine whether the claims are entitled to priority and full payment through the plan.47 This can be long, involved and costly litigation. Prior to BAPCPA, bankruptcy courts looked to cases interpreting § 523(a)(5)(B) for guidance whether a debt was entitled to priority under (former) § 507(a)(7)(B).48 BAPCPA retained the condition that a debt must be actually in the nature of alimony, maintenance or support to be a DSO for purposes of priority under § 507(a)(1) and nondischargeability under §§ 523(a)(5) and 1328(a).49

[20]

Especially with respect to alimony and support under former § 507(a)(7), DSOs under current § 507(a)(1) and taxes under § 507(a)(8), litigation to determine priority claims at confirmation in a Chapter 13 case may have important preclusive effects in any subsequent nondischargeability litigation. For example, in California Board of Equalization v. Harleston (In re Harleston),50 the California Board of Equalization filed a proof of claim for unpaid gasoline taxes in a Chapter 13 case. The claim was challenged, and the bankruptcy court determined that the claim was not entitled to priority under § 507(a)(8). The Chapter 13 case converted to Chapter 7. The U.S. Court of Appeals for the Ninth Circuit held that the bankruptcy court’s finding that the debt was not entitled to priority in the Chapter 13 case was preclusive that the claim was dischargeable after conversion.

[21]

Harleston is a warning to taxing authorities and support claimants to take priority litigation seriously in a Chapter 13 case. The possibility of preclusion also raises the question whether debtor’s counsel in a Chapter 13 case should consider using a complaint rather than a motion to determine whether a claim is entitled to priority. Although a contested matter to determine priority can be commenced by motion or objection, using a complaint with respect to taxes or a DSO maximizes the procedural similarities to nondischargeability litigation, best positioning the debtor to argue for preclusion if the need arises.

[22]

The exception to discharge in § 523(a)(15) for “property settlement” debts that are not in the nature of alimony, maintenance or support, added to the Code in 1994, was not listed among the claims that were entitled to priority in former § 507(a)(7),51 and that remains true with respect to § 507(a)(1) after BAPCPA.52 Debts that fall into § 523(a)(15) are not entitled to full payment in a Chapter 13 case under § 1322(a)(2).53 One reported bankruptcy court opinion parses through the state divorce decree, identifying the support portions as priority claims that must be paid in full and separating the “equitable distribution of property” portions that would be nondischargeable in a Chapter 7 case under § 523(a)(15) but that are not priority and are treated as ordinary unsecured claims in a Chapter 13 case.54

[23]

Ongoing postpetition payments of alimony or support were treated differently by the pre-BAPCPA Bankruptcy Code than prepetition debts for alimony, maintenance or support that were entitled to priority and full payment under §§ 507(a)(7) and 1322(a)(2). An unmatured debt for alimony, maintenance or support was excepted from discharge by § 523(a)(5) but was disallowed by § 502(b)(5).55 Prior to BAPCPA, postpetition monthly installments of alimony, maintenance or support maturing after the Chapter 13 petition were not allowable claims and were often paid by the debtor from postpetition income, not as priority claims through the Chapter 13 trustee.56

[24]

However, even before BAPCPA, in some jurisdictions based on long experience, ongoing alimony, maintenance or support debts were paid through the Chapter 13 trustee’s office as part of confirmed Chapter 13 plans, notwithstanding that allowance of such claims under § 502(b)(5) is problematic. There was nothing in the pre-BAPCPA wording of § 507(a)(7) to except an unmatured debt for alimony, maintenance or support from the seventh priority. Even the postpetition installments of alimony, maintenance or support that fit the description in § 507(a)(7) were priority debts entitled to full payment through the Chapter 13 plan under § 1322(a)(2). Unfortunately, § 502(b)(5) disallows the unmatured installments, creating problems in Chapter 13 cases. To accomplish confirmation, § 1322(a)(2) required the plan to provide for full payment of the unmatured portion of an alimony, maintenance or support claim that was entitled to priority under § 507(a)(7), notwithstanding that the unmatured portion is disallowed by § 502(b)(5). The full-payment requirement in § 1322(a)(2) and the disallowance of unmatured claims for alimony, maintenance or support in § 502(b)(5) were dysfunctional in Chapter 13 cases with respect to the payment of postpetition installments of alimony or support.

[25]

Detailed elsewhere,57 BAPCPA enlarged and repositioned the priority for alimony, maintenance and support by defining DSO in § 101(14A) to include a support debt “that accrues before, on, or after” the petition in a Chapter 13 case, “including interest that accrues on that debt as provided under applicable nonbankruptcy law notwithstanding any other provision of this title.”58 BAPCPA did not amend § 502(b)(5), but several plausible statutory constructions of new § 101(14A) lead to the conclusion that a maturing, postpetition DSO is part of the debt entitled to first priority under § 507(a)(1) that must be paid in full under § 1322(a)(2)—“notwithstanding” the contrary implications of § 502(b)(5).59

[26]

The § 507(a)(8) priority60 is for taxes—unsecured claims held by governmental units. This priority is frequently litigated in Chapter 13 cases because the statutory elements for priority in § 507(a)(8) are intricate.61

[27]

Section 507(a)(8) priority includes income or gross receipts taxes “for a taxable year ending on or before the date of the filing of the petition;62 property taxes not secured by a lien, incurred before commencement of the case;63 withholding taxes;64 some employment taxes;65 excise taxes;66 customs duties;67 and tax penalties, if “in compensation for actual pecuniary loss.68 BAPCPA rewrote the priority for taxes in § 507(a)(8) to exclude from the various counting periods time during which an offer in compromise was pending and time during which a stay of collection action was in effect in a prior bankruptcy case.69 Because some of the taxes entitled to priority under § 507(a)(8) and to full payment under § 1322(a)(2) are also nondischargeable at the completion of payments in a Chapter 13 case70 and all priority taxes are nondischargeable at hardship discharge,71 determining both priority and dischargeability of taxes early in the Chapter 13 case is useful to the construction of the plan.72

[28]

Priority claims entitled to full payment under § 1322(a)(2) include obligations arising from the debtor’s failure to maintain the capital of an Insured Depository Institution.73 This priority, found in § 507(a)(9), was added to the Bankruptcy Code by the Crime Control Act of 1990.74 Priority claims under § 507(a)(9) are generally held by the Resolution Trust Corporation and typically are large enough that the debtor is not eligible for Chapter 13 in the first instance. Section 507(a)(9) has had little impact in Chapter 13 cases, though the increase in the debt limits for Chapter 13 in the Bankruptcy Reform Act of 1994 and every three years thereafter75 has brought debtors with larger debt loads into Chapter 13.

[29]

A new tenth priority was added by BAPCPA in § 507(a)(10) for “allowed claims for death or personal injury resulting from the operation of a motor vehicle or vessel if such operation was unlawful because the debtor was intoxicated from using alcohol, a drug or another substance.”76 This priority could include debt secured by a lien77 and overlaps, but not perfectly, the exception to discharge in § 523(a)(9).78

[30]

In many jurisdictions, the suggested, preferred or required form for the Chapter 13 plan has special lines and entries to provide for the most common priority claims—domestic support obligations and taxes, for example. The debtor who wins the argument that a claim is not priority under § 507 can treat the claim through the plan as an ordinary unsecured debt that is not entitled to full payment under § 1322(a)(2).79


 

1  Pub. L. No. 109-8, 119 Stat. 23 (2005). Priority claims after BAPCPA are discussed beginning at § 73.1  Plan Must Provide Full Payment and beginning at § 136.1  Treatment of Priority Claims.

 

2  See §§ 98.1 [ Plan Must Provide Full Payment ] § 73.1  Plan Must Provide Full Payment, 100.2 [ Interest Not Required, with Exceptions ] § 73.5  Interest Not Required, with Exceptions, 299.1 [ Postpetition Interest on Priority Claims ] § 136.16  Postpetition Interest on Priority Claims before BAPCPA, 441.1 [ New and Changed Treatment of Priority Claims ] § 73.6  Treatment of Priority Claims Changed by BAPCPA and 520.1 [ Postpetition Interest on Priority Claims ] § 136.17  Postpetition Interest on Priority Claims after BAPCPA.

 

3  See §§ 98.1 [ Plan Must Provide Full Payment ] § 73.1  Plan Must Provide Full Payment and 440.1 [ New and Changed Priority Claims ] § 73.3  Priority Claims Added or Changed by BAPCPA.

 

4  11 U.S.C. § 101(14A), discussed below in this section and in §§ 440.1 [ New and Changed Priority Claims ] § 73.3  Priority Claims Added or Changed by BAPCPA, 441.1 [ New and Changed Treatment of Priority Claims ] § 73.6  Treatment of Priority Claims Changed by BAPCPA, 458.1 [ Domestic Support Obligations Assigned or Payable to Government: § 1322(a)(4) ] § 88.5  Domestic Support Obligations Assigned or Payable to Government: § 1322(a)(4) after BAPCPA, 519.1 [ Domestic Support Obligations ] § 136.21  Domestic Support Obligations after BAPCPA and 520.1 [ Postpetition Interest on Priority Claims ] § 136.17  Postpetition Interest on Priority Claims after BAPCPA.

 

5  BAPCPA amended 11 U.S.C. § 507(a), inserting domestic support obligations as the first priority and moving wage, salary and commission claims from § 507(a)(3) to (a)(4). See §§ 440.1 [ New and Changed Priority Claims ] § 73.3  Priority Claims Added or Changed by BAPCPA and 441.1 [ New and Changed Treatment of Priority Claims ] § 73.6  Treatment of Priority Claims Changed by BAPCPA. See, e.g., In re Allen, 241 B.R. 710 (Bankr. D. Mont. 1999) (Ex-spouse’s priority claim under § 507(a)(3) for wages was a claim against a professional corporation, not against the debtor.).

 

6  See below in this section, and see §§ 292.1 [ Taxes ] § 136.2  Taxes before BAPCPA, 440.1 [ New and Changed Priority Claims ] § 73.3  Priority Claims Added or Changed by BAPCPA and 513.1 [ Taxes ] § 136.3  Taxes after BAPCPA.

 

7  11 U.S.C. § 1322(a)(2) (emphasis added).

 

8  See §§ 440.1 [ New and Changed Priority Claims ] § 73.3  Priority Claims Added or Changed by BAPCPA, 441.1 [ New and Changed Treatment of Priority Claims ] § 73.6  Treatment of Priority Claims Changed by BAPCPA and 519.1 [ Domestic Support Obligations ] § 136.21  Domestic Support Obligations after BAPCPA.

 

9  11 U.S.C. § 507(a) (emphasis added), as amended by BAPCPA.

 

10  See Sidney P. Levinson, Does an Administrative Expense Constitute a “Claim” under the Bankruptcy Code?, 25 Cal. Bankr. J. 389 (2000).

 

11  See discussion of priority claims beginning at § 73.1  Plan Must Provide Full Payment and beginning at § 136.1  Treatment of Priority Claims.

 

12  See §§ 294.1 [ Debtors’ Attorneys’ Fees ] § 136.6  Debtors’ Attorneys’ Fees before BAPCPA and 359.1 [ On Administrative Expenses ] § 162.5  On Administrative Expenses.

 

13  Prior to October 17, 2005, the effective date of BAPCPA, filing fees would have been in the first priority of § 507(a)(1).

 

14  See also § 100.5 [ Filing Fees ] § 73.10  Filing Fees.

 

15  See §§ 98.1 [ Plan Must Provide Full Payment ] § 73.1  Plan Must Provide Full Payment, 100.2 [ Interest Not Required, with Exceptions ] § 73.5  Interest Not Required, with Exceptions, 299.1 [ Postpetition Interest on Priority Claims ] § 136.16  Postpetition Interest on Priority Claims before BAPCPA and 520.1 [ Postpetition Interest on Priority Claims ] § 136.17  Postpetition Interest on Priority Claims after BAPCPA.

 

16  See § 73.3  Priority Claims Added or Changed by BAPCPA§ 73.11  Filing Fees after BAPCPA§ 136.2  Taxes before BAPCPA, § 136.3  Taxes after BAPCPA, § 137.1  Postpetition Claims before BAPCPA§ 137.2  Postpetition Claims after BAPCPA and § 158.6  Postpetition Claims.

 

17  See §§ 275.2 [ In General: Filing is Required for Allowance ] § 132.2  In General: Filing is Required for Allowance, 279.1 [ Priority Claims, Including Requests for Payment of Administrative Expenses ] § 132.6  Priority Claims, Including Requests for Payment of Administrative Expenses, 281.1 [ Postpetition Claims ] § 132.9  Postpetition Claims, 302.1 [ Postpetition Claims ] § 137.1  Postpetition Claims before BAPCPA and 524.1 [ Postpetition Claims ] § 137.2  Postpetition Claims after BAPCPA.

 

18  See §§ 292.1 [ Taxes ] § 136.2  Taxes before BAPCPA, 302.1 [ Postpetition Claims ] § 137.1  Postpetition Claims before BAPCPA, 513.1 [ Taxes ] § 136.3  Taxes after BAPCPA and 524.1 [ Postpetition Claims ] § 137.2  Postpetition Claims after BAPCPA.

 

19  See, e.g., §§ 292.1 [ Taxes ] § 136.2  Taxes before BAPCPA, 302.1 [ Postpetition Claims ] § 137.1  Postpetition Claims before BAPCPA and 524.1 [ Postpetition Claims ] § 137.2  Postpetition Claims after BAPCPA.

 

20  See § 136.4  Trustee’s Fees and Expenses before BAPCPA§ 136.7  Debtors’ Attorneys’ Fees after BAPCPA, § 136.13  Failed Adequate Protection after BAPCPA, § 136.14  Miscellaneous Administrative Expenses and Priority Claims before BAPCPA and § 136.15  Miscellaneous Administrative Expenses and Priority Claims after BAPCPA.

 

21  See § 522.1 [ The New DWI Priority ] § 136.22  The Driving or Boating while Intoxicated Priority after BAPCPA.

 

22  Prior to BAPCPA, § 507(a)(7) granted priority to claims for alimony, maintenance and support that could also be secured claims. See §§ 300.1 [ Secured Priority Claims? ] § 136.18  Secured Priority Claims before BAPCPA and 521.1 [ Secured Priority Claims ] § 136.19  Secured Priority Claims after BAPCPA.

 

23  See, e.g., In re Grabow, 323 B.R. 236 (Bankr. W.D. Wis. Apr. 4, 2005) (Kelley) (Real estate taxes are not a priority claim because priority in § 507(a)(8) is reserved for unsecured claims, and real estate taxes are secured by a statutory lien under Wisconsin law. Plan cannot provide for real estate taxes as a priority claim without postpetition interest over objection of mortgage holder whose position will be eroded by accumulation of postpetition interest.).

 

24  See § 149.1 [ Power to Classify Unsecured Claims: Tests for Unfair Discrimination ] § 87.1  Power to Classify Unsecured Claims: Tests for Unfair Discrimination. See, e.g., In re McCormick, 354 B.R. 246 (Bankr. C.D. Ill. Oct. 23, 2006) (Gorman) (Although scheduled as priority debt, student loans owed to U.S. Department of Education are not priority, and separate classification for more favorable treatment implicates unfair discrimination test.).

 

25  See §§ 440.1 [ New and Changed Priority Claims ] § 73.3  Priority Claims Added or Changed by BAPCPA, 458.1 [ Domestic Support Obligations Assigned or Payable to Government: § 1322(a)(4) ] § 88.5  Domestic Support Obligations Assigned or Payable to Government: § 1322(a)(4) after BAPCPA, 498.1 [ Domestic Support Obligations Must Be Current ] § 113.3  Domestic Support Obligations Must Be Current and 519.1 [ Domestic Support Obligations ] § 136.21  Domestic Support Obligations after BAPCPA.

 

26  See below in this section, and see §§ 301.1 [ Alimony, Maintenance and Support in Cases Filed after October 22, 1994 ] § 136.20  Alimony, Maintenance and Support in Cases Filed after October 22, 1994 and 303.1 [ Alimony, Maintenance and Support in Cases Filed before October 22, 1994 ] § 138.1  Alimony, Maintenance and Support in Cases Filed before October 22, 1994.

 

27  See also §§ 345.1 [ Alimony, Maintenance or Support ] § 158.1  Alimony, Maintenance or Support and 552.1 [ Domestic Support Obligations: § 523(a)(5) ] § 159.5  Domestic Support Obligations: § 523(a)(5) for discussion of the dischargeability of debts for alimony, maintenance and support and DSOs.

 

28  11 U.S.C. § 507(a)(7), as amended and redesignated by Bankruptcy Reform Act of 1994, Pub. L. No. 103-394, § 304(c), 108 Stat. 4106 (1994).

 

29  See §§ 440.1 [ New and Changed Priority Claims ] § 73.3  Priority Claims Added or Changed by BAPCPA, 441.1 [ New and Changed Treatment of Priority Claims ] § 73.6  Treatment of Priority Claims Changed by BAPCPA and 519.1 [ Domestic Support Obligations ] § 136.21  Domestic Support Obligations after BAPCPA.

 

30  See § 35.6 [ Schedule E—Priority Claims ] § 36.12  Schedule E—Priority Claims.

 

31  See §§ 151.1 [ Priority Claims ] § 87.4  Priority Claims and 152.2 [ Alimony, Maintenance and Support ] § 88.4  Alimony, Maintenance and Support.

 

32  See §§ 301.1 [ Alimony, Maintenance and Support in Cases Filed after October 22, 1994 ] § 136.20  Alimony, Maintenance and Support in Cases Filed after October 22, 1994 and 303.1 [ Alimony, Maintenance and Support in Cases Filed before October 22, 1994 ] § 138.1  Alimony, Maintenance and Support in Cases Filed before October 22, 1994. See, e.g., Mudd v. Jacobson (In re Jacobson), 231 B.R. 763, 765 (Bankr. D. Ariz. 1999) (The 1994 amendments to § 507(a)(7) together with §§ 1322(a)(2) and 1328 demonstrate that “Congress intended in 1994 to change the law such that maintenance and support obligations not only may, but must, be treated specially and paid in full under a Chapter 13 plan. This conclusion undercuts the fundamental reasoning of [Pacana v. Pacana-Siler (In re Pacana), 125 B.R. 19 (B.A.P. 9th Cir. 1991)].” Prepetition, nondischargeable child support arrearages are priority claims entitled to full payment under § 1322(a)(2). To avoid relief from the stay, debtor must provide a mechanism for paying postpetition interest by allowing portion of income necessary to pay interest to revest in the debtor and be subject to collection.).

 

33  See §§ 441.1 [ New and Changed Treatment of Priority Claims ] § 73.6  Treatment of Priority Claims Changed by BAPCPA and 458.1 [ Domestic Support Obligations Assigned or Payable to Government: § 1322(a)(4) ] § 88.5  Domestic Support Obligations Assigned or Payable to Government: § 1322(a)(4) after BAPCPA.

 

34  See § 345.1 [ Alimony, Maintenance or Support ] § 158.1  Alimony, Maintenance or Support. Domestic support obligations are nondischargeable under the Code as amended by BAPCPA. See § 552.1 [ Domestic Support Obligations: § 523(a)(5) ] § 159.5  Domestic Support Obligations: § 523(a)(5).

 

35  See §§ 345.1 [ Alimony, Maintenance or Support ] § 158.1  Alimony, Maintenance or Support and 354.1 [ Exceptions to Hardship Discharge ] § 160.6  Exceptions to Hardship Discharge before BAPCPA.

 

36  11 U.S.C. § 523(a)(5)(A) (emphasis added), prior to 2005 amendment.

 

37  11 U.S.C. § 507(a)(7)(A), prior to 2005 amendment.

 

38  See §§ 440.1 [ New and Changed Priority Claims ] § 73.3  Priority Claims Added or Changed by BAPCPA, 441.1 [ New and Changed Treatment of Priority Claims ] § 73.6  Treatment of Priority Claims Changed by BAPCPA, 458.1 [ Domestic Support Obligations Assigned or Payable to Government: § 1322(a)(4) ] § 88.5  Domestic Support Obligations Assigned or Payable to Government: § 1322(a)(4) after BAPCPA and 519.1 [ Domestic Support Obligations ] § 136.21  Domestic Support Obligations after BAPCPA for discussion of the priority treatment and nondischargeability of DSOs.

 

39  269 B.R. 881 (Bankr. N.D. Ala. 2001).

 

40  269 B.R. 699 (Bankr. D. Idaho 2001).

 

41  269 B.R. at 708.

 

42  Anecdotally, one insider to the drafting of the 1994 amendments recalls that this lack of parallelism resulted when a Congressional staffer reached for a superseded edition of the United States Code that contained a repealed version of § 523(a)(5) using the words added to § 507(a)(7) in 1994. This explanation makes historical sense. Section 523(a)(5) of the 1978 Code contained the broader exception for assigned support obligations found in the 1994 version of § 507(a)(7). Section 523(a)(5) was amended in 1981 to substitute the more limited exception to the exception for support debts assigned pursuant to the Social Security Act or assigned to a governmental entity. An uninformed grab for the bound volume of the 1978 Bankruptcy Code would have produced exactly the lack of parallelism we saw in former §§ 523(a)(5) and 507(a)(7).

 

43  This is a variation on the problem of separate classification of nondischargeable claims discussed beginning at § 88.1  In General.

 

44  See In re Beverly, 196 B.R. 128, 131–33 (Bankr. W.D. Mo. 1996) (Child support arrearages are priority claims entitled to full payment notwithstanding that they may have been assigned to a government agency. Debtor listed unsecured nonpriority debt of $33,239.15 for child support arrearages. Debtor listed creditor as “Child Support Enforcement Unit” and claimed that the child support arrearages were assigned and thus not entitled to priority under § 507(a)(7). “Section 507(a)(7) is nearly identical to § 523(a)(5), except that § 523(a)(5) provides two exceptions to the exception as to the assignments, whereas § 507(a)(7) does not. . . . In other words, under § 523(a)(5)(A), if the debt for child support was assigned to a governmental unit it cannot be discharged in bankruptcy. . . . If, on the other hand, it was assigned to a non-governmental agency, it would be dischargeable. . . . [T]he omission of the exception to the exception from § 507(a)(7) is, in its effect, meaningless when it is read harmoniously with § 523(a)(5)(A) and the judicial interpretation of that section. Section 523(a)(5)(A) still mandates that claims for child support which were assigned to a government agency are nondischargeable. And as several courts . . . found prior to the addition of § 507(a)(7) to the Act, those claims are to be given preferential treatment in a Chapter 13 plan. If they are not, the automatic stay may be lifted as to the child support arrearages and the claimant may pursue other remedies. . . . Such a claim should not be classified with other general unsecured debts receiving only a percentage of the claim. As such, a debt for child support which has been assigned to a government agency should be treated as though it is a priority debt in a Chapter 13 plan: it should be paid in full.” After calling 800 number in phone book for “Child Support Enforcement,” court determined that support arrearage was not actually “assigned” as contemplated in § 507(a)(7) because the Division of Child Support Enforcement “does not make payments to the mother in lieu of Debtor’s payments. Rather, it is a government agency which attempts to assist in administering and enforcing the payment of child support. . . . The debt is still owed to the mother but the payments are made through the agency, so no assignment has occurred.” Even if the claim was assigned, the Division of Child Support Enforcement was a government agency and thus the claim was nondischargeable under § 523(a)(5)(A) and “[a]s a result, the debt for child support arrearages . . . is nondischargeable and should be paid in full under the plan, or the automatic stay may be lifted.”).

 

45  11 U.S.C. § 507(a)(7)(B) (prior to 2005 amendment).

 

46  See § 345.1 [ Alimony, Maintenance or Support ] § 158.1  Alimony, Maintenance or Support.

 

47  See, e.g., Hines v. Hines (In re Hines), 356 B.R. 786 (B.A.P. 6th Cir. June 29, 2006) (Table Decision) (Gregg, Parsons, Whipple) (Applying McCafferty v. McCafferty (In re McCafferty), 96 F.3d 192 (6th Cir. Sept. 18, 1996) (Lively, Kennedy, Siler), divorce decree that required debtor to pay ex-spouse $12,500 for her share of retirement plan created constructive trust that did not become property of Chapter 13 estate. Ex-spouse’s claim was not a dischargeable debt, and debtor could not treat interest in retirement plan as an unsecured, nonpriority claim.), aff’g No. 05-12959, 2005 WL 4057840 (Bankr. S.D. Ohio Aug. 10, 2005) (unpublished) (Perlman).).

 

48  See, e.g., Dewey v. Dewey (In re Dewey), 223 B.R. 559, 562–64 (B.A.P. 10th Cir. 1998) (Hold harmless obligation to former spouse is contingent claim actually in the nature of alimony, maintenance or support for purposes of § 507(a)(7) that must be paid in full to satisfy § 1322(a)(2). Property settlement agreement required debtor to hold ex-spouse harmless from joint obligations. Ex-spouse objected to confirmation of plan because “it did not propose to pay her contingent claim arising under ¶ 5 of the Agreement as a priority claim as required under § 1322(a)(2).” After “extensive testimony,” the bankruptcy court determined that ex-spouse’s claim was entitled to priority under § 507(a)(7). The BAP found that “the language in § 507(a)(7) mirrors that of § 523(a)(5), which governs the dischargeability of spousal support debts. ‘Support’ under § 523(a)(5) has been defined by the Tenth Circuit in numerous decisions and, given the similarity of the language of §§ 507(a)(7) and 523(a)(5) and their purpose, the definition developed under § 523(a)(5) should have equal effect under § 507(a)(7).”); In re Grovatt, No. CIV. A. 00-955, 2000 WL 1281524 (E.D. Pa. Sept. 5, 2000) (unpublished) (Obligations to pay college education expenses and to pay mortgage on former marital residence are actually in the nature of alimony, maintenance or support in the debtor’s Chapter 13 case.); In re McLaughlin, 320 B.R. 661 (Bankr. N.D. Ohio Feb. 1, 2005) (Baxter) (Attorney fees awarded by state court in contempt action for nonpayment of child support are priority under § 507(a)(7) and must be paid in full.); In re Foster, 292 B.R. 221, 226–27 (Bankr. M.D. Fla. 2003) (Attorney’s fees awarded by domestic relations court are priority unsecured claims under § 507(a)(7) that would also be nondischargeable under § 523(a)(5). “Cases interpreting section 523(a)(5) are guiding authority for application of section 507(a)(7) because of the almost identical language used and the same policy concerns related to the issue of support and maintenance obligations. . . . [T]he rationale for including attorney fee awards as ‘support’ when the state court’s decision is based on the parties’ relative financial needs and ability to pay [is] equally applicable under section 507(a)(7).”); In re Fiore, 290 B.R. 138 (Bankr. E.D. Mo. 2003) (Attorney’s fees for modification of child support awarded by family court are entitled to priority under § 507(a)(7) and to full payment under § 1322(a)(2).); In re Dupree, 285 B.R. 759 (Bankr. M.D. Ga. 2002) (Debtor failed to prove state court award of attorneys’ fees and back child support was not entitled to priority.); In re Eades, No. 02-10859, 2002 WL 31802477 (Bankr. N.D. Cal. Aug. 23, 2002) (unpublished) (Attorneys’ fees awarded to ex-spouse are priority debt under § 507(a)(7).); Brunson v. Austin (In re Austin), 271 B.R. 97, 104 (Bankr. E.D. Va. 2001) (Bankruptcy court must determine whether debt is actually in the nature of support to identify priority claims at confirmation; applying § 523(a)(5) standards, assumption of credit card debt was support based on large income disparity, but debtor’s agreement to pay ex-spouse 25% of settlement from a personal injury lawsuit was not actually in the nature of support. “Whether the claim is entitled to priority status is important because in a Chapter 13 plan the debtor must provide for the payment in full of all claims entitled to priority in order to have the plan confirmed. . . . [C]ourts have used the case law interpreting § 523(a)(5) to determine whether the subject debt is actually in the nature of alimony, maintenance or support because the language of § 507(a)(7) mirrors that of § 523(a)(5).”); Brugger v. Brugger (In re Brugger), 254 B.R. 321 (Bankr. M.D. Pa. 2000) (Asset transfers ordered by domestic relations court as partial payment of award of one-half interest in the debtor’s business were actually in the nature of alimony, maintenance and support and were priority claims entitled to full payment.); In re Taylor, 252 B.R. 346, 351–55 (Bankr. E.D. Va. 1999) (Attorney fees awarded to ex-spouse by state court are actually in the nature of alimony, maintenance or support and are priority claims entitled to full payment, notwithstanding that state appellate court determined that attorney fees could not be awarded as lump-sum spousal support. “‘Notwithstanding the fact that the issue was brought under § 507(a)(7)(B), the plethora of case law discussing whether debts are “actually in the nature of alimony, maintenance or support” under § 523(a)(5) is applicable and useful precedent in determining whether such debts should receive priority treatment.’ . . . The burden is placed upon the objecting spouse to prove that a debt connected with attorney fees is nondischargeable under § 523(a)(5) because it is ‘actually in the nature of alimony, maintenance or support.’ . . . State court labels attached to a spousal obligation, while not binding, may and should be considered by the bankruptcy court. . . . This court will use both modes of analysis, balancing the apparent function of the award and relative finances of the litigants with the nature of the legal services in order to find the intent behind the award of fees. . . . [I]n light of the relative finances of the litigants, the award of attorneys fees appears to reflect the state courts’ balancing of the parties’ needs. . . . [I]t is well within the province of the bankruptcy court to find a fee award to be in the nature of alimony, maintenance, or support even though the fee at issue was for services in the divorce litigation where both property and support were at issue. . . . [E]ach award of attorney fees was sufficiently connected with the ascertaining of alimony, maintenance, or support. Accordingly, this indebtedness is entitled to priority status under § 507(a)(7)(B), and the court will sustain the objection and deny confirmation of the debtor’s chapter 13 plan because it fails to comply with § 1322(a)(2).”); In re Messinger, 241 B.R. 697 (Bankr. D. Idaho 1999) (Prepetition state court child support judgment is a priority claim under § 507(a)(7) that must be paid in full under § 1322(a)(2).); In re Crosby, 229 B.R. 679, 681–82 (Bankr. E.D. Va. 1998) (Agreement to pay college education expenses was nondischargeable support that must be paid in full in a Chapter 13 case. “[T]he language of section 507 parallels that of section 523(a)(5). Because the language of the two sections is identical, if the debt is nondischargeable under section 523(a)(5), it receives priority status under section 507(a)(7). . . . [T]he support agreement entered into for the provision of college education expenses is in the nature of alimony and support and is therefore entitled to priority status. . . . Because debtor’s Chapter13 plan does not provide for full, priority payment of the college education expenses, Crosby’s objection to confirmation is sustained.”); Bryer v. Hetrick (In re Bryer), 216 B.R. 755, 762–64 (Bankr. E.D. Pa. 1998) (Ex-spouse’s right under domestic relations order to offset payments he made on a home mortgage against his obligations of support to the debtor is not in the nature of alimony, maintenance or support and thus is a general unsecured claim in the wife’s Chapter 13 case. “[A] § 507(a)(7) determination should be guided by the same factors as a § 523(a)(5) determination. . . . [T]he substance of the Agreement constituted a net order for support from the Defendant to the Wife. . . . [T]he language utilized by the parties is not indicative of a support obligation from the Wife to the Defendant . . . [T]he Defendant earned approximately $81,000 a year and the Wife had the capacity to earn about $28,000 per year . . . . [A] disparity of income in favor of the Defendant . . . . [T]he financial circumstances of the respective parties did not and still do not . . . indicate any net support obligation of the Wife to the Defendant. . . . [N]othing presented by the parties demonstrates that the Defendant needed the mortgage payments or the credits to obtain shelter for himself or his son living with him. . . . Defendant’s claim for a credit against the Wife cannot be found to be in the nature of support or intended to be so, as to justify its classification as entitled to a priority under 11 U.S.C. § 507(a)(7).”); Beaupied v. Doe (In re Doe), 193 B.R. 12, 15–19 (Bankr. N.D. Cal. 1996) (Fees for court-appointed attorney and neutral expert in paternity and custody litigation are actually in the nature of support for purposes of § 523(a)(5) and are entitled to priority under § 507(a)(7) and to full payment under § 1322(a)(2). “[T]he similarity in language between § 507(a)(7) and § 523(a)(5) invites the conclusion that the case law interpreting the latter should be considered in applying the former. . . . [P]ersuasive authority in the Ninth Circuit and other circuits indicates that attorneys fee for the attorney representing a child in a custody action should be nondischargeable in a § 523(a)(5) case, and thus should be entitled to priority under § 507(a)(7). . . . The neutral expert fees in question resulted from evaluating the respective abilities of Debtor and Father to provide adequate care and support for Child . . . . A finding of nondischargeability of the neutral experts’ fees is required under § 523(a)(5). . . . [T]he State Court’s order requiring Debtor to reimburse Father for paying ‘more than his share’ to these experts does not constitute an assignment of these debts that would take away priority status under § 507(a)(7)(A).”), rev’d sub nom. Beaupied v. Chang (In re Chang), 210 B.R. 578 (B.A.P. 9th Cir. 1997), rev’d, 163 F.3d 1138, 1141–42 (9th Cir. 1998) (Affirming bankruptcy court, fees and expenses owed to father and guardian ad litem for debtor’s child are nondischargeable under § 523(a)(5) and are priority claims under § 507(a)(7) entitled to full payment through Chapter 13 plan. “[T]he identity of the payee is less important than the nature of the debt. . . . We agree with the bankruptcy court’s holding that application of § 507(a)(7) should be coincidental with application of § 523(a)(5).”); In re Grady, 180 B.R. 461, 464–66 (Bankr. E.D. Va. 1995) (Obligations to former spouse and attorney arising from state court divorce decree are actually support, are priority claims under § 507(a)(7) as amended by the Bankruptcy Reform Act of 1994, and are entitled to full payment under § 1322(a)(2). “Under the Bankruptcy Reform Act of 1994, Congress amended 11 U.S.C. § 507(a)(7), to provide a new priority for spousal support obligations. . . . This Court must therefore determine whether the provisions of the divorce decree fall within the aegis of being actually in the nature of alimony, maintenance or support. . . . According to general rules of statutory construction, identical words used in different parts of the same act are intended to have the same meaning. . . . The language of § 523(a)(5)(B), the provision governing which specific debts § 1328(b) excepts from discharge, is identical [sic] to that of amended § 507(a)(7)(B). . . . [T]he plethora of case law discussing whether debts are ‘actually in the nature of alimony, maintenance or support’ under § 523(a)(5) is applicable and useful precedent in determining whether such debts should receive priority treatment. Payment of support need not be paid directly to the spouse or ex-spouse to be considered a nondischargeable debt. . . . [W]e must look to the intent of the trier [of] fact with respect to those obligations. . . . [T]he fees incurred in the litigation would be actually in the nature of support or maintenance. . . . [T]he intent of the Circuit Court of the City of Portsmouth was that the debtor pay the fees and costs enumerated after due consideration of the parties’ respective assets and financial ability to pay the costs of the divorce. Therefore, this Court finds that the debts for attorney’s fees and costs are actually in the nature of maintenance or support under the statutory language of both 11 U.S.C. § 523(a)(5) and § 507(a)(7)(B), and are therefore priority claims.”). See also § 345.1 [ Alimony, Maintenance or Support ] § 158.1  Alimony, Maintenance or Support.<|is [sic] added above because the language is not really “identical”? [sic] is needed because the language is not actually identical. |> the opinion reads as written above, the [sic] was added.

 

49  See §§ 440.1 [ New and Changed Priority Claims ] § 73.3  Priority Claims Added or Changed by BAPCPA and 519.1 [ Domestic Support Obligations ] § 136.21  Domestic Support Obligations after BAPCPA. See, e.g., In re Carter, Nos. 08-10136, 08-10512, 2008 WL 5045912 (Bankr. M.D. Ala. Sept. 30, 2008) (unpublished) (Williams) (Claim filed by State Department of Human Resources Child Support Enforcement Division for costs of paternity testing is priority claim under § 507(a)(1)(B); genetic testing to determine paternity and child support obligation is in nature of maintenance and support of child.).

 

50  331 F.3d 699 (9th Cir. 2003).

 

51  Section 523(a)(15) was amended by BAPCPA, but “property settlement” claims described in § 523(a)(15), as amended, are dischargeable upon completion of payments under a Chapter 13 plan. See § 552.1 [ Domestic Support Obligations: § 523(a)(5) ] § 159.5  Domestic Support Obligations: § 523(a)(5).

 

52  11 U.S.C. § 507(a)(1).

 

53  See Dewey v. Dewey (In re Dewey), 223 B.R. 559, 564 (B.A.P. 10th Cir. 1998) (The enactment of § 523(a)(15) in 1994 did not change the definition of “support” for purposes of §§ 523(a)(5) and 507(a)(7). “In a Chapter 13 case, the debt described in § 523(a)(15) is not a nondischargeable obligation under § 1328(a)(2), nor is it a priority obligation required to be paid under § 1322(a)(2). The only relevance the existence of § 523(a)(15) debt has in relation to confirmation of a Chapter 13 plan is in the determination of whether the Chapter 13 plan has been proposed in good faith as required by § 1325(a)(3).”).

 

54  See Brugger v. Brugger (In re Brugger), 254 B.R. 321 (Bankr. M.D. Pa. 2000).

 

55  See §§ 152.2 [ Alimony, Maintenance and Support ] § 88.4  Alimony, Maintenance and Support, 246.1 [ Alimony and Support Collection after Confirmation ] § 124.6  Alimony and Support Collection after Confirmation, 301.1 [ Alimony, Maintenance and Support in Cases Filed after October 22, 1994 ] § 136.20  Alimony, Maintenance and Support in Cases Filed after October 22, 1994 and 303.1 [ Alimony, Maintenance and Support in Cases Filed before October 22, 1994 ] § 138.1  Alimony, Maintenance and Support in Cases Filed before October 22, 1994.

 

56  See, e.g., In re Dorf, 219 B.R. 498, 501 (Bankr. N.D. Ill. 1998) (Prepetition maintenance arrears of $33,800 is a nondischargeable, priority claim that must be paid in full, though without interest, under § 1322(a)(2); ongoing monthly payment of $3,300 is not an allowable claim, but it must be paid by the debtor from postpetition income and does figure into feasibility calculation at confirmation. Debtor’s former spouse had an uncontested claim for $33,800 for prepetition support arrearages and an ongoing right to $3,300 each month until February 1, 1999. “[T]he maintenance payments involved here are better categorized as periodic alimony . . . . Accordingly, Nina’s claim for these payments vest [sic] only as each payment of $3,300 becomes due and future payments were not vested at the time the pre-bankruptcy agreement was signed . . . . [T]he prepetition monthly arrearage of $33,800 . . . is the only claim covered under 11 U.S.C. § 1322(a)(1) [sic] . . . . Debtor must pay Nina Dorf’s nondischargeable, priority claim of $33,800 in deferred cash payments over the life of any Chapter 13 Plan, while also remaining current on the post-petition monthly payments of $3,300. Maintenance payments which came due after filing of the bankruptcy case will continue to come due until February 1, [1999], and are therefore not covered by the Chapter 13 Plan. Those payments are due and payable regardless of and outside the bankruptcy. . . . Under 11 U.S.C. § 502(b)(5), a claim excepted from discharge under § 523(a)(5) for an unmatured debt may be disallowed. Section 502(b)(5) also provides that a claim for debt ‘unmatured on the date of filing the petition and that is excepted from discharge under § 523(a)(5)’ is not an allowed claim. By virtue of this section, Congress intended that post-petition alimony, maintenance or support claims ‘are to be paid from the debtor’s postpetition property, because the claims are nondischargeable.’”).

 

57  See §§ 440.1 [ New and Changed Priority Claims ] § 73.3  Priority Claims Added or Changed by BAPCPA, 441.1 [ New and Changed Treatment of Priority Claims ] § 73.6  Treatment of Priority Claims Changed by BAPCPA and 519.1 [ Domestic Support Obligations ] § 136.21  Domestic Support Obligations after BAPCPA.

 

58  11 U.S.C. § 101(14A), discussed in §§ 440.1 [ New and Changed Priority Claims ] § 73.3  Priority Claims Added or Changed by BAPCPA, 441.1 [ New and Changed Treatment of Priority Claims ] § 73.6  Treatment of Priority Claims Changed by BAPCPA and 519.1 [ Domestic Support Obligations ] § 136.21  Domestic Support Obligations after BAPCPA.

 

59  See §§ 440.1 [ New and Changed Priority Claims ] § 73.3  Priority Claims Added or Changed by BAPCPA, 441.1 [ New and Changed Treatment of Priority Claims ] § 73.6  Treatment of Priority Claims Changed by BAPCPA, 498.1 [ Domestic Support Obligations Must Be Current ] § 113.3  Domestic Support Obligations Must Be Current, 519.1 [ Domestic Support Obligations ] § 136.21  Domestic Support Obligations after BAPCPA, 524.1 [ Postpetition Claims ] § 137.2  Postpetition Claims after BAPCPA and 552.1 [ Domestic Support Obligations: § 523(a)(5) ] § 159.5  Domestic Support Obligations: § 523(a)(5).

 

60  See §§ 292.1 [ Taxes ] § 136.2  Taxes before BAPCPA and 513.1 [ Taxes ] § 136.3  Taxes after BAPCPA. BAPCPA did not renumber § 507(a)(8).

 

61  See §§ 292.1 [ Taxes ] § 136.2  Taxes before BAPCPA and 513.1 [ Taxes ] § 136.3  Taxes after BAPCPA.

 

62  11 U.S.C. § 507(a)(8)(A). See, e.g., In re Ramos, No. 05-91824-A-13G, 2006 WL 2850409, at *3 (Bankr. E.D. Cal. Sept. 29, 2006) (unpublished) (McManus) (Tax claims from failure to declare income from embezzlement more than three years before the petition are not entitled to priority. “[T]he embezzlement by the debtor occurred in 1996 and 1997. . . . This was more than three years before the filing of the petition. To be a priority claim under section 507(a)(8)(A)(i), the return had to be due after three years before the petition. Nor were any taxes assessed to the debtor within 240 days of the petition and they were not the subject of an offer and compromise. Hence, section 507(a)(8)(A)(ii) does not make the taxes priority claims. Finally, while the taxes may be assessable after the filing of the petition, this is so because the debtor has allegedly failed to file returns, or filed them late, or filed fraudulent returns, or has otherwise evaded taxes. Therefore, they are excluded from priority treatment by section 507(a)(8)(A)(iii).”); In re Harrell, 318 B.R. 692, 694 (Bankr. E.D. Ark. Jan. 5, 2005) (Mixon) (Income taxes for 1996, 1997 and 1998 are general unsecured claims not entitled to priority and are dischargeable in Chapter 13 case filed on June 10, 2003, when tax returns for years in question were filed after petition. “[S]ubsection 507(a)(8)(A)(iii) gives priority to income taxes not assessed before but still assessable after the commencement of the case. However, unassessed but assessable taxes of a kind specified in section 523(a)(1)(B) or (C) are not entitled to priority under section 507(a)(8)(A)(iii).”).

 

63  11 U.S.C. § 507(a)(8)(B). See, e.g., In re Grabow, 323 B.R. 236 (Bankr. W.D. Wis. Apr. 4, 2005) (Kelley) (Real estate taxes are not priority claim because priority in § 507(a)(8) is reserved for unsecured claims, and real estate taxes are secured by a statutory lien under Wisconsin law.).

 

64  11 U.S.C. § 507(a)(8)(C). See, e.g., In re Kogut, 325 B.R. 400 (Bankr. W.D. Ark. June 1, 2005) (Mixon) (Sales taxes that became due more than three years prior to petition were not entitled to priority under § 507(a)(8)(E) and were not trust fund obligations under § 507(a)(8)(C). Debtor was former officer/shareholder of corporation that was primary obligor. Proof did not establish trust fund liability but did establish that tax debts were too old for priority.).

 

65  11 U.S.C. § 507(a)(8)(D).

 

66  11 U.S.C. § 507(a)(8)(E).

 

67  11 U.S.C. § 507(a)(8)(F).

 

68  11 U.S.C. § 507(a)(8)(G). See, e.g., In re Cespedes, 393 B.R. 403, 409 (Bankr. E.D.N.C. Sept. 8, 2008) (Small) (Agreeing with United States v. Dumler (In re Cassidy), 983 F.2d 161 (10th Cir. Dec. 7, 1992) (McKay, Seth, Brorby), 10% early IRA withdrawal assessment “is a penalty that is not compensation for actual pecuniary loss, and the claim related to that assessment shall be treated as a general unsecured claim, and not a priority claim.”).

 

69  See 11 U.S.C. § 507(a)(8), as amended by BAPCPA, discussed in §§ 440.1 [ New and Changed Priority Claims ] § 73.3  Priority Claims Added or Changed by BAPCPA, 441.1 [ New and Changed Treatment of Priority Claims ] § 73.6  Treatment of Priority Claims Changed by BAPCPA and 513.1 [ Taxes ] § 136.3  Taxes after BAPCPA.

 

70  See 11 U.S.C. § 1328(a)(2), discussed in § 548.1 [ Taxes ] § 159.1  Taxes.

 

71  See 11 U.S.C. §§ 1328(c)(2) and 523(a)(1), discussed in §§ 354.1 [ Exceptions to Hardship Discharge ] § 160.6  Exceptions to Hardship Discharge before BAPCPA and 558.1 [ New and Changed Exceptions to Hardship Discharge ] § 160.7  Exceptions to Hardship Discharge Added or Changed by BAPCPA.

 

72  See also § 513.1 [ Taxes ] § 136.3  Taxes after BAPCPA. See, e.g., In re Malin, 356 B.R. 535 (Bankr. D. Kan. July 18, 2006) (Nugent) (Adversary proceeding to determine whether federal income taxes were dischargeable under § 507(a)(8)(A) is appropriate before confirmation because § 1322(a) requires plan to provide for payment of § 507 priority claims in full.).

 

73  11 U.S.C. § 507(a)(9) (formerly 11 U.S.C. § 507(a)(8)), redesignated by Bankruptcy Reform Act of 1994, Pub. L. No. 103-394, § 304(c), 108 Stat. 4106 (1994).

 

74  Pub. L. No. 101-647, § 2522(d), 104 Stat. 4789 (1990).

 

75  See § 11.1 [ Dollar Amounts ] § 14.1  Dollar Amounts.

 

76  11 U.S.C. § 507(a)(10), as amended by BAPCPA, discussed in §§ 440.1 [ New and Changed Priority Claims ] § 73.3  Priority Claims Added or Changed by BAPCPA, 441.1 [ New and Changed Treatment of Priority Claims ] § 73.6  Treatment of Priority Claims Changed by BAPCPA, 460.1 [ New Priority Claims ] § 87.5  Priority Claims after BAPCPA, 522.1 [ The New DWI Priority ] § 136.22  The Driving or Boating while Intoxicated Priority after BAPCPA and 555.1 [ Boating or Flying while Intoxicated: § 523(a)(9) ] § 159.8  Boating or Flying while Intoxicated: § 523(a)(9).

 

77  See §§ 521.1 [ Secured Priority Claims ] § 136.19  Secured Priority Claims after BAPCPA and 522.1 [ The New DWI Priority ] § 136.22  The Driving or Boating while Intoxicated Priority after BAPCPA.

 

78  See § 555.1 [ Boating or Flying while Intoxicated: § 523(a)(9) ] § 159.8  Boating or Flying while Intoxicated: § 523(a)(9).

 

79  See, e.g., In re Allen, 241 B.R. 710, 711 (Bankr. D. Mont. 1999) (Rejects ex-spouse’s claim that the medical portion of an unliquidated, contingent liability for assault and battery is a priority debt under § 507(a)(7)(B) because claim had not been reduced to a court order. Ex-spouse’s priority claim under § 507(a)(4) for unsecured contributions to an employee benefit plan was rejected because the divorce decree gave the debtor the benefit plan. Ex-spouse’s claim for priority status in 35% of debtor’s income in excess of $156,000 was rejected because debtor had not received in excess of $156,000. Ex-spouse’s priority claim under § 507(a)(3) for wages was a claim against a professional corporation, not against the debtor.); In re Pfalzgraf, 236 B.R. 390 (Bankr. E.D. Wis. 1999) (Child of Dennis Pfalzgraf has claim in Chapter 13 case of Kathleen Pfalzgraf because community property of Kathleen and Dennis is liable for Dennis’s support obligation; however, claim is not priority because it is not a claim of Kathleen’s ex-spouse or child for § 507 purposes.); Bryer v. Hetrick (In re Bryer), 216 B.R. 755 (Bankr. E.D. Pa. 1998) (Ex-spouse’s right under domestic relations order to offset payments he made on a home mortgage against his obligations of support to the debtor is not in the nature of alimony, maintenance or support and thus is a general unsecured claim in the wife’s Chapter 13 case.); In re Serino, 190 B.R. 778 (Bankr. M.D. Pa. 1995) (Requirement that debtor pay priority tax claims in full is not violated because nurses who worked for the debtor were independent contractors, not employees; thus debtor was not liable for trust fund taxes with respect to the nurses.).