Cite as: Keith M. Lundin, Lundin On Chapter 13, § 89.8, at ¶ ____, LundinOnChapter13.com (last visited __________).
The allowance, payment and discharge of postpetition claims under § 1305 is a complex and uncertain area of Chapter 13 practice.1 Because it is not certain that the debtor can modify the plan after confirmation to make provision for postpetition claims,2 it is recommended that every Chapter 13 plan specifically provide for the payment of postpetition claims.3
Although including postpetition claims in some other class of creditors is not prohibited—for example, as part of the class of general unsecured claims—typically it is necessary to put postpetition claims in a separate class because the treatment of postpetition claims is different from the treatment of other unsecured claims. As detailed elsewhere, a postpetition claim holder can refuse to file a proof of claim if it is not happy with the proposed treatment under the plan.4 A postpetition claim for which no proof of claim has been filed is not allowable, cannot be provided for by the plan and cannot be discharged through the Chapter 13 plan.5 Although postpetition interest is ordinarily not payable to unsecured claim holders, the holder of a postpetition claim under § 1305 can withhold filing a claim and leverage the debtor into paying postpetition interest.
Even if the plan pays 100 percent of all unsecured claims (without interest), providing 100 percent payment without interest for postpetition claims allowed under § 1305 is not guaranteed to convince postpetition claim holders to file proofs of claim. If the plan provides 100 percent payment with interest for postpetition claims, then the plan separately classifies postpetition claims even if the plan proposes full payment (without interest) for the general unsecured claims. Any separate classification of postpetition claims will be measured against the unfair-discrimination standard in § 1322(b)(1).
Separate classification of postpetition claims for full payment with interest might be fair discrimination because the holder of an allowable postpetition claim typically has supplied essential goods or services that enable the debtor to complete payments under the plan. This will often be true because, with the exception of postpetition tax claims, to be allowable the postpetition debt must be “for property or services necessary for the debtor’s performance under the plan.”6 The holder of a postpetition claim controls whether to file a proof of claim and thus can choose whether to be paid through the plan or to seek other relief.7 Separate classification for full payment with interest maximizes the probability that the holder of a postpetition claim will file a proof of claim and participate without disrupting payments to other creditors.
1 See §§ 204.1 [ Providing for Postpetition Claims ] § 113.6 Providing for Postpetition Claims, 213.1 [ To Provide for Postpetition Creditors ] § 114.5 To Provide for Postpetition Creditors, 261.1 [ To Provide for Postpetition Claims ] § 127.4 To Provide for Postpetition Claims, 281.1 [ Postpetition Claims ] § 132.9 Postpetition Claims and 302.1 [ Postpetition Claims ] § 137.1 Postpetition Claims before BAPCPA for discussion of payment of postpetition claims; see also § 350.1 [ Postpetition Claims ] § 158.6 Postpetition Claims for discussion of discharge of postpetition claims.
2 See § 261.1 [ To Provide for Postpetition Claims ] § 127.4 To Provide for Postpetition Claims.
3 See § 204.1 [ Providing for Postpetition Claims ] § 113.6 Providing for Postpetition Claims.
4 See § 281.1 [ Postpetition Claims ] § 132.9 Postpetition Claims.
6 11 U.S.C. § 1305(a)(2); see § 302.1 [ Postpetition Claims ] § 137.1 Postpetition Claims before BAPCPA.