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Should Chapter 13 Plans Discharge Student Loans?

The Tenth Circuit Bankruptcy Appellate Panel's (BAP) recent decision in In re Mersmann, 318 B.R. 537 (10th BAP 2004), underscores the continuing tension between chapter 13 plan provisions discharging student loans, and implies that such discharge provisions are contrary to law and should not be enforceable.2 Courts considering the issue have either tbcused on the res judicata effect of confirmed chapter 13 plans and the finality of orders, or have found such plan discharge provisions contrary to due process requirements and unenforceable.3 Debtors argue that the need to effectuate the freshstart concept of bankruptcy overrides any procedural due process that creditors are entitled to. ...

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