§ 158.5     Claims Not Provided for by the Plan or Disallowed under § 502
Cite as:    Keith M. Lundin, Lundin On Chapter 13, § 158.5, at ¶ ____, LundinOnChapter13.com (last visited __________).
[1]

Except as provided in § 1328(a)(1),1 (2)2 and (3)3 at completion of all payments under the plan, the Chapter 13 debtor is discharged of all debts “provided for by the plan or disallowed under Section 502.”4 The extent of the discharge in a Chapter 13 case was described by one court this way: “As long as the plan contains some provision describing the treatment of [the] debt, and no exception to the Chapter 13 discharge applies, the debt is discharged.”5

[2]

If a (dischargeable) debt is provided for by the debtor’s plan, the debt is discharged even if the plan pays less than all of the claim. A plan that provides zero percent payment of a class of claims still provides for those claims.6 A completed plan that would have paid $18,000 to the IRS on account of a claim for $56,751.12 discharges the $18,000 portion when the IRS did not file a proof of claim and received no distributions under the plan.7 A student loan was provided for and dischargeable (prior to 1990) though the debtor chose to compromise the claim rather than treat the claim as a long-term obligation under § 1322(b)(5).8 A class of claims that is not mentioned or dealt with in any way in the confirmed plan is not “provided for” and is not discharged at the completion of payments under the plan.9

[3]

“Provided for” in § 1328(a) has evolved to bear great weight as a gatekeeper to discharge in Chapter 13 cases. There is no indication in the legislative history that “provided for” in § 1328(a) was perceived by Congress to be an important phrase of art. The courts have struggled with and occasionally tortured the phrase to expand or restrict the discharge in Chapter 13 cases.

[4]

In 1993 in Rake v. Wade,10 the Supreme Court directly addressed the meaning of “provided for” in § 1328(a):

Section 1328(a), for example, utilizes the phrase “provided for by the plan” in dealing with the discharge of debts under Chapter 13. As used in § 1328(a), that phrase is commonly understood to mean that a plan “makes a provision” for, “deals with,” or even “refers to” a claim. . . . In addition, § 1328(a) unmistakenly contemplates that a plan “provides for” a claim when the plan cures a default and allows for the maintenance of regular payments on that claim, as authorized by § 1322(b)(5). Section 1328(a) states that “all debts provided for by the plan” are dischargeable, and then lists three exceptions. One type of claim that is “provided for by the plan” yet excepted from discharge under § 1328(a) is a claim “provided for under § 1322(b)(5) of this title.”11
[5]

A recurrent issue in Chapter 13 cases is the question whether a debt is provided for and thus discharged when the creditor failed to file a proof of claim or filed an untimely claim but the creditor would have received payment through the plan had an allowable claim been filed.12 A claim holder that fails to file a timely proof of claim, and on whose behalf no timely proof of claim is filed by the debtor or the trustee,13 cannot (upon objection) have an allowable claim.14 A claim holder that does not have an allowed claim cannot participate in distributions under the plan.15 But the discharge of debts upon completion of payments under § 1328(a) is not dependent on whether a claim holder has an allowed claim. If a debt is provided for, it is discharged without regard to whether the creditor has received distributions under the plan. “Provided for” in § 1328(a) is one predicate to discharge; allowance of a claim is not.

[6]

In fact, the opposite relationship is established by § 1328(a): disallowance of a claim under § 502 is an alternative route to discharge of a claim; even a debt that is not provided for by the plan is discharged by § 1328(a) if the claim is disallowed under § 502 and not otherwise excepted from discharge by § 1328(a)(1) through (3). For example, an untimely filed proof of claim that is disallowed by § 502(b)(9) in a Chapter 13 case filed after October 22, 1994, is dischargeable at the completion of payments under the plan without regard to whether the debt is provided for by the plan.

[7]

A scheduled creditor that has disabled itself from having an allowable claim faces discharge at the completion of payments under the plan if the plan provides for payment of that claim. As recognized by the Supreme Court in Rake, “provided for” means that the plan makes a provision for the claim or deals with the claim or refers to the claim—not that the claim was actually paid (in whole or in part) by distributions through the plan.16 There are many reported decisions holding that failure to file and untimely filing of a proof of claim results in discharge if the claim was in a class that would have received distributions had an allowable proof of claim been filed.17 An exception to the full-payment discharge arises when a debt is not provided for by the plan and the claim is not disallowed under § 502.

[8]

The discharge of priority and secured debts for which no allowable proof of claim has been filed presents no conceptual differences from the discharge of unsecured claims for which no timely proof of claim has been filed. Section 1328(a) makes no distinction among the kind of debts that are dischargeable if provided for by the plan (or disallowed under § 502). The reported cases are in conflict whether the failure of a secured claim holder to file an allowable proof of claim results in discharge of the lien securing the claim.18

[9]

In Chapter 13 cases filed after October 22, 1994, § 502(b)(9) states clearly that, upon objection, a claim is not allowable if “proof of such claim is not timely filed.”19 In Chapter 13 cases filed after October 22, 1994, untimely filed claims are “disallowed under § 502” for purposes of § 1328(a) and thus would be dischargeable upon completion of payments without regard to whether the plan provided for payment. The discharge of untimely filed claims in Chapter 13 cases is subject to the exceptions that otherwise apply at the completion of payments under a plan.20

[10]

“Amended” claims may or may not be dischargeable upon completion of payments, depending upon exactly what happened during administration of the case. The Code and Rules are not altogether clear with respect to the treatment of amended claims.21 If an allowable claim was filed, an amendment to that claim may be allowed as filed under § 502(a) and will be subject to discharge under § 1328(a) only if provided for by the plan. On the other hand, there is case law suggesting that the creditor must do more than just file an amended claim if it wants to avoid discharge (without payments) of its amended claim.

[11]

For example, in In re Carr,22 the IRS filed a timely proof of claim that was allowed. After confirmation of a plan providing for full payment of the IRS’s claim, and after entry of an order allowing claims, the IRS filed an amended claim that was larger. The debtor completed payments under the plan consistent with the original proof of claim. The IRS argued that the difference between its original and amended proofs of claim was not dischargeable. The bankruptcy court disagreed, holding that amended claims are not automatically allowed, but are allowable after confirmation and after an order allowing claims only upon motion for reconsideration under Bankruptcy Rule 3008. The IRS’s failure to move for reconsideration doomed to discharge the difference between its original and amended claims.

[12]

Providing for claims for discharge purposes has been distorted by some courts to require something more than describing the claim and its treatment under the plan: the claim holder must also be afforded an opportunity to realize the treatment proposed by the plan. For example, a fair number of courts have held that an unscheduled or incorrectly scheduled creditor23 that is without notice or knowledge of the Chapter 13 case prior to the deadline for timely filing a proof of claim will not be discharged because the claim is not provided for by the plan and is not disallowed under § 502.24

[13]

A claim is not provided for and not discharged when the debtor attempts to amend the schedules to include additional debts after payments under the plan have been completed.25 Similarly, when the petition failed to disclose names used by the debtor within the past six years and thus notice was insufficient to permit creditors to properly identify the debtor, the unfiled claims were excepted from discharge because not provided for by the plan.26 Some reported decisions find that the extent of a creditor’s informal notice or knowledge of the Chapter 13 case affects whether the creditor is provided for and discharged.27

[14]

In re Elstien28 is an excellent illustration of how notice, knowledge, the scheduling of debts and “provided for” in § 1328(a) have been woven together by some courts to determine the extent of the discharge in Chapter 13 cases. The debtor in Elstien was president and major shareholder of a corporation. Prior to bankruptcy, the IRS asserted trust fund recovery penalty claims against the debtor individually. The debtor did not schedule the IRS in his Chapter 13 case and in the statement of affairs answered “none” to questions about corporate offices and stock ownership. The IRS began administrative proceedings against the debtor and had actual knowledge that the debtor filed a Chapter 13 case.

[15]

The Illinois Department of Revenue was also a creditor of the debtor. The IDR was victim of the false schedules and false statement of affairs, but the IDR never had actual knowledge of the Chapter 13 case in time to object to confirmation or to timely file a proof of claim. The bankruptcy court eventually dismissed the Chapter 13 petition for misconduct in connection with the case, but along the way the court observed that the tax claims of the IDR would not be dischargeable at the completion of payments under the plan because the debtor’s false schedules and false statement prevented the IDR from being provided for by the plan. The IRS, on the other hand, had actual knowledge of the Chapter 13 case in time to meaningfully participate, thus the IRS’s claim could be discharged at the completion of payments under the plan:

If a plan does not provide for a claim for priority taxes, that debt will not be discharged. In [United States v. Trembath (In re Trembath), 205 B.R. 909 (Bankr. N.D. Ill. 1997)], the Court held that the debtor’s failure to properly schedule a claim for a trust fund recovery penalty or to properly answer the statement of affairs meant the debt was not “provided for by the plan” and therefore not discharged. . . . If the plan provides for a debt, but the creditor fails to file a claim, the underlying debt will not be paid but will be discharged. . . . Notwithstanding the priority status of a tax claim, this rule applies to the IRS. . . . [E]ven assuming appropriate language in a debtor’s chapter 13 plan, the debt will not be provided for by the plan if the creditor has not been given adequate notice of the chapter 13 proceedings. . . . “The constitutional component of notice is based upon a recognition that creditors have a right to adequate notice and the opportunity to participate in a meaningful way in the course of bankruptcy proceedings.” . . . Several decisions under § 1328(a) say that if a debtor’s omission on bankruptcy filings caused a creditor’s failure to file a proof of claim, the debt owed the creditor is not discharged. . . . At least one court has held that, notwithstanding a debtor’s failure to comply with his duties to accurately schedule liabilities and provide requested information, a tax creditor’s actual knowledge of the case is sufficient basis on which to find compliance with the condition of § 1328 that a debt be “provided for in the plan.”29
[16]

These decisions are a clear message for debtors: The discharge in a Chapter 13 case may depend on the accuracy of names and addresses for creditors in the lists and schedules filed at the beginning of the case.30 The logic of these cases is a “due process” notion that a creditor is not bound by discharge in a Chapter 13 case if notice was not sufficient to permit the creditor to, at least, file a timely proof of claim.

[17]

But due process will not suffice as the principle underlying all of these cases because many involve the government as a creditor.31 And the courts that have defined “provided for” to include a notice component are less clear whether notice of the bankruptcy case itself is sufficient or whether notice of the bar dates and of the content of the plan is also required.32 When does “inquiry notice” satisfy the notice component of providing for a creditor in a Chapter 13 case?33

[18]

None of the reported cases holding that an unscheduled creditor is not provided for discusses the extent of this judge-made exception to discharge in Chapter 13 cases. For example, if the Chapter 13 plan pays a 10 percent dividend to unsecured claim holders, is an unsecured claim holder without notice entitled to a 10 percent exception to discharge or is the creditor’s entire debt not provided for by the plan? What is the extent of injury to an unsecured creditor that is without notice of a zero percent Chapter 13 plan? What if the unscheduled claim would not have been allowable, in whole or in part, had a timely proof of claim been filed? Does it matter whether the failure to schedule was inadvertent?34

[19]

There is no mention in § 1328(a) of lack of notice as an exception to discharge in a Chapter 13 case. Just the opposite is true with respect to the discharge under other chapters: In a Chapter 7 case and an individual’s Chapter 11 case, § 523(a)(3) specifically provides the circumstances under which lack of notice renders a debt nondischargeable. By design or by inadvertence, except at hardship discharge in a Chapter 13 case, there is no Code provision excepting from discharge the claims of creditors that have no notice or have imperfect notice.

[20]

This is not an argument for secret discharges in Chapter 13 cases. But it is an argument for caution as the courts develop a nonstatutory exception to discharge in Chapter 13 cases based on problems with notice.

[21]

“Provided for by the plan” in § 1328(a) is an unsuitable platform for managing the consequences of defects in notice to creditors. As demonstrated above, participation in the Chapter 13 case by filing a claim or objecting to confirmation are voluntary acts dependent on timely notice to creditors that are unrelated to whether the plan provides for payment of a debt. Defining provided for in § 1328(a) to include a notice component makes the consequence of defective notice an all-or-nothing proposition: if notice was inadequate, the debt is not provided for and is not discharged even when adequate notice would not have enabled the creditor to collect all of its claim during the Chapter 13 case. Mixing notice issues with the question whether a debt is provided for by the plan precludes the bankruptcy courts from fashioning remedies for a lack of notice that are appropriate to the facts of individual cases. The Code does not compel this outcome, and it is unfair to Chapter 13 debtors who all too often innocently fail to properly schedule a creditor in cases where the lack of notice hardly justifies barring the discharge of the entire unscheduled debt.

[22]

There are statutory, constitutional and, perhaps, rule-based alternatives to § 1328(a) as the vehicle for relief from discharge when notice is inadequate. 11 U.S.C. § 1328(e) authorizes revocation of discharge obtained by the Chapter 13 debtor through fraud.35 The debtor who intentionally omits to schedule or notice a creditor may be captured by § 1328(e). Reported decisions have recognized a nonstatutory “due process” exception to discharge when notice fails in a Chapter 13 case.36 Some courts have allowed creditors with inadequate notice to realize relief from the discharge order under Bankruptcy Rule 9024 (Rule 60 of the Federal Rules of Civil Procedure).37

[23]

These other remedies do not require any torturing of “provided for” in § 1328(a) in cases where the plan specifies a treatment, but the creditor was precluded by lack of notice from full realization of what the plan provided. These approaches give the bankruptcy court discretion to fashion appropriate relief based on the facts to include partial relief from the discharge order—for example, to the extent the confirmed plan would have paid a creditor’s claim had the creditor timely filed a proof of claim. Proof that the creditor would not have had an allowable claim even if it had adequate notice would be relevant. Some of these alternatives offer the creditor relief by motion before a collection action, without risking a violation of the stay or of the discharge injunction.38

[24]

One author has suggested that a Chapter 13 debtor can control the discharge of unscheduled claims that are unknown to the debtor by an appropriate plan provision for discharge of unscheduled debts for which no allowable proof of claim is filed before completion of payments under the plan.39

[25]

The Bankruptcy Reform Act of 1994 contained provisions dealing with notices that might be interpreted to affect whether a creditor is provided for. The 1994 Act amended § 342(c) of the Code to require that notice to a creditor “shall contain the name, address, and taxpayer identification number of the debtor, but the failure of such notice to contain such information shall not invalidate the legal effect of such notice.”40 Section 342(c) might be consulted to define the minimum notice required for a Chapter 13 plan to provide for a creditor. That Congress limited the legal effect of neglecting to include the listed information is reasonably interpreted to mean that the adequacy of notice to creditors as a predicate to discharge is not conclusively determined by § 342(c).

[26]

The Bankruptcy Reform Act of 1994 also amended Bankruptcy Rule 7004 to require service on an insured depository institution by certified mail addressed to an officer in contested matters and adversary proceedings.41 Bankruptcy Rule 7004 is not implicated when giving notice to creditors of the filing of a case or of the content of a Chapter 13 plan. It is unlikely that the 1994 amendment to Bankruptcy Rule 7004 will impact analysis of notice as a component of providing for creditors under § 1328(a).

[27]

An issue rarely addressed in reported decisions but often present in Chapter 13 cases is whether a debt paid directly to a creditor by the debtor—other than a long-term debt provided for under § 1322(b)(5)42—is discharged upon completion of payments to other creditors under the plan. The Chapter 13 debtor can act as a disbursing agent to make some payments directly to creditors, without the assistance of the Chapter 13 trustee.43 Arguably, a claim is provided for by a plan that specifies payments by the debtor directly to the creditor. It would seem to follow that upon completion of payments under the plan, the debtor is entitled to a discharge of all debts, including those paid directly to creditors.

[28]

If the debt paid directly has been paid in full, no obvious problems attend its discharge. But what happens to discharge when the claim being paid directly has not been paid in full when payments to other creditors through the trustee are concluded? At what point does the debtor complete “all payments under the plan”? Are payments under the plan completed when payments to the Chapter 13 trustee are completed or when all creditors are paid according to the plan, including those paid directly by the debtor? Does the discharge relieve the debtor of personal liability to creditors being paid directly by the debtor that are not yet paid in full? The Bankruptcy Code does not answer these questions.

[29]

If the Chapter 13 plan says that the debtor will make direct payments to a creditor, it is not unreasonable to require the “completion” of those payments as a condition for discharge under § 1328(a). But as a practical matter, the Chapter 13 trustee will not know when the debtor has completed payments directly to a creditor. The usual practice is that the Chapter 13 trustee signals completion of payments when the trustee has received all that the plan requires the trustee to disburse to creditors. Discharges are routinely entered in Chapter 13 cases without regard to whether the debtor has completed payments directly to creditors.

[30]

A creditor to be paid directly by the debtor should insist on a provision of the confirmed plan that excepts its debt from discharge until it is fully paid whatever the plan provides. Otherwise, the completion of payments to other creditors puts the claim in jeopardy of discharge before the debt has been paid in full.44 If the debt paid directly by the debtor is a long-term debt of the sort contemplated by § 1322(b)(5), then that claim is excepted from discharge upon completion of payments to other creditors by § 1328(a)(1).45

[31]

One reported decision holds that direct payment by the debtor does not provide for the debt, with a devastating consequence for the debtor: the debt is not dischargeable at the completion of payments notwithstanding that the debt would have been dischargeable had the plan provided for payments through the Chapter 13 trustee. In Mayflower Capital Co. v. Huyck (In re Huyck),46 the confirmed plan cured prepetition mortgage arrearages through the Chapter 13 trustee but paid the continuing monthly mortgage payment “outside the plan.” The debtor completed payments, and discharge was entered. After discharge, the debtor defaulted, and the mortgage holder foreclosed. A $61,529.07 deficiency resulted. The mortgage holder filed a complaint for a declaration whether the deficiency was discharged. The bankruptcy court held that payment “outside the plan” did not provide for the debt for purposes of discharge under § 1328(a):

Defendants [the debtors] chose not to modify the rights of Community Bank. . . . Accordingly, Defendants, consistent with 11 U.S.C. § 1322(b)(2), left unaffected the bundle of rights of [sic] Community Bank had under its Note—this bundle of rights included the right to pursue a deficiency. . . . “The most natural reading of the phrase to ‘provid[e] for the plan’ is to ‘make provision for’ or ‘stipulate to’ something in the plan.” . . . Here, the Defendants’ Plan split Community Bank’s secured claim into two separate categories: (1) the amount to cure—paid through the Plan and (2) the regular monthly payments—paid outside of the Plan. The amount to cure was “provided for” under the Plan. The regular monthly payments—i.e., the maintenance of the underlying Note and Deed of Trust during the pendency of the bankruptcy—were not “provided for” under the Plan. . . . The Defendants simply chose to make ongoing payments to this secured creditor outside of the Plan. The ramification of this decision was that the Defendants did not (and could not) invoke the “cramdown” provisions of 11 U.S.C. § 1325(a)(5). Instead, Defendants, outside of the Chapter 13 Plan, would be required to either pay the debt according to the original contract or work out some arrangement with Community Bank . . . . Another byproduct of the Defendant’s choice to make regular ongoing payments to Community Bank outside of the Plan was that the debt would not be discharged under 11 U.S.C. § 1328(a).47
[32]

The reported opinion in Huyck indicates that the mortgage was not protected from modification by § 1322(b)(2).48 The debtor could have paid the monthly installments through the Chapter 13 trustee and discharged personal liability at the completion of payments under the plan. Huyck is a jarring example of why Chapter 13 debtors should never pay debts directly to creditors49—the extent of the discharge in a Chapter 13 case may turn on whether “provided for” in § 1328(a) includes direct payment by the debtor.

[33]

It has been said that obligations that do not constitute claims under § 101(5) cannot be provided for by the plan and are not discharged upon completion of payments.50 Expenses of administration51 and postpetition claims under § 130552 are possible exceptions to this rule.


 

1  See § 351.1 [ Long-Term Debts ] § 158.7  Long-Term Debts for discussion of long-term debts excepted from discharge by § 1328(a)(1).

 

2  See § 158.1  Alimony, Maintenance or Support and § 159.5  Domestic Support Obligations: § 523(a)(5) for discussion of the exception to discharge for alimony, maintenance or support in § 1328(a)(2); see § 158.2  Student Loans and § 159.6  Student Loans: § 523(a)(8) for discussion of the exception to discharge for student loans in § 1328(a)(2); see § 158.3  Driving while Intoxicated and § 159.8  Boating or Flying while Intoxicated: § 523(a)(9) for discussion of the exception to discharge for driving while intoxicated in § 1328(a)(2); and see § 159.1  Taxes§ 159.2  False Representations and Fraud: § 523(a)(2)§ 159.3  Fraud and Defalcation: § 523(a)(4)§ 159.4  Unscheduled Creditors: § 523(a)(3)§ 159.7  Willful or Malicious Injury: § 1328(a)(4) and § 159.9  Chapter 7 Trustee Compensation: § 1326(d).

 

3  See § 348.1 [ Criminal Restitution and Criminal Fines ] § 158.4  Criminal Restitution and Criminal Fines for discussion of the exception to discharge for criminal restitution and criminal fines in § 1328(a)(3).

 

4  11 U.S.C. § 1328(a).

 

5  In re Harvey, 88 B.R. 863 (Bankr. N.D. Ill. 1988).

 

6  Lawrence Tractor Co. v. Gregory, 705 F.2d 1118 (9th Cir. 1983) (Zero payment plan does “provide for” payment of claims; thus, claims are discharged by § 1328.); Matravers v. United States (In re Matravers), 149 B.R. 204 (Bankr. D. Utah 1993) (Income taxes for the year 1983 are discharged in a Chapter 13 case filed in 1984 where the confirmed plan provided that the IRS would receive no payment on account of its claim for 1983 taxes.); In re Whitehead, 61 B.R. 397 (Bankr. D. Or. 1986) (Section 1328(a) may discharge a claim determined to be nondischargeable in prior Chapter 7 case notwithstanding that the debtor’s plan proposes no payment of the claim.). Contra In re Case, 11 B.R. 843 (Bankr. D. Utah 1981).

 

7  In re Bryant, 294 B.R. 791 (Bankr. S.D. Ala. 2002).

 

8  In re Ali, 63 B.R. 591 (Bankr. E.D. Wis. 1986) (applying pre-1990 law).

 

9  See, e.g., Telfair v. First Union Mortgage Corp. (In re Telfair), 224 B.R. 243, 248–49 (Bankr. S.D. Ga. 1998) (Discharge injunction does not prohibit mortgage company from applying regular monthly payments first to attorney fees and expenses incurred in filing postconfirmation request for relief from the stay where plan provides for ongoing regular monthly payment under § 1322(b)(5) but makes no provision for the payment of postconfirmation attorney fees and expenses. “[P]ostconfirmation attorney’s fees, was not a debt provided for under the debtor’s plan nor allowed under § 502. . . . [T]he debtor’s plan requires the debtor to ‘make regular post-petition payments as they become due’ . . . . The plan does not provide for the payment of postpetition debt other than regular monthly payments. . . . The debtor’s plan does not provide for postpetition debt due First Union other than the regular monthly payments and the discharge does not affect the debt due First Union pursuant to § 1322(b)(5). As the discharge does not affect the debt due First Union, the discharge injunction of § 524 has no application.”), aff’d, Case No. 98-00193-CV-1 (S.D. Ga. 1999), aff’d, 216 F.3d 1333 (11th Cir. 2000); In re Guevara, 258 B.R. 59, 61 (Bankr. S.D. Fla. 2001) (Plan that cured arrearages and made regular monthly mortgage payments did not provide for increases in taxes and insurance; increases paid by the mortgage holder are not discharged at the completion of payments. “A debt is ‘provided for’ when the plan contains some provision describing the treatment of that debt. . . . The plan did not provide for the payment of any increases of taxes or insurance. . . . [T]here were no plan provisions anticipating increases in payments. . . . [B]ecause the confirmed plan did not provide for the annual increases, the debt owed HSBC for payment of the increased amounts is not discharged under the plan.”); In re Herndon, 188 B.R. 562, 565 (Bankr. E.D. Ky. 1995) (Tax claim survives discharge because confirmed plan did not provide for payment of priority claims. Untimely filed proof of claim by IRS is not allowed, and IRS is bound by the confirmed plan; however, “[s]ince the IRS claim was not dealt with by the second amended plan confirmed by the court and the IRS did not receive notice in time to file a claim and participate in the debtors’ plan, the IRS claim remains fully collectible after the chapter 13 case is concluded. 11 U.S.C. § 1328(a). The discharge granted to debtors in this section discharges them only from those debts dealt with by the plan. . . . Due Process concerns are not implicated; the right of the IRS to collect its claim is simply abated until the plan payments are completed.”); In re DeBerry, 183 B.R. 716, 717–18 (Bankr. M.D.N.C. 1995) (“The plan as confirmed in this case does not contain any provisions dealing with or providing any treatment for postpetition claims which might be allowed under Section 1305 of the Bankruptcy Code as permitted by Section 1322(b)(6). Since the plan does not deal with or make any provisions for postpetition claims, including the postpetition claim filed by the IRS, the debtors’ plan does not ‘provide for’ the IRS claim within the meaning of Section 1328 which provides a discharge to the debtor with respect to claims provided for by the plan. . . . Since the plan in this case does not provide for the postpetition IRS claim and cannot be modified to do so, the IRS claim will not be discharged by any discharge for the debtors in this Chapter 13 case.”).

 

10  508 U.S. 464, 113 S. Ct. 2187, 124 L. Ed. 2d 424 (1993).

 

11  508 U.S. at 474 (footnotes omitted).

 

12  See also § 121.3  Failure to Provide For for discussion of the effects of confirmation on claims not provided for by the plan; and § 135.1  Timing, Procedure and Evidence Presumption, § 135.2  Allowance and Objections to Claims: Changes by BAPCPA and § 135.7  Untimely Filed Claims in Cases Filed after October 22, 1994 for discussion of the consequences of failure to file and untimely filed proofs of claim.

 

13  See § 134.1  Timing, Form, Superseding and Amended Claims before 2005, § 134.2  Filing of Claims by Debtor or Trustee after 2005 Amendments to Bankruptcy Rule 3004 and § 134.3  Strategic Considerations: When to File Claims for Creditors.

 

14  Even an untimely filed claim is allowed absent objection. See discussion beginning at § 135.1  Timing, Procedure and Evidence Presumption.

 

15  See § 135.5  Failure to File Proof of Claim, § 135.6  Untimely Filed Claims in Cases Filed before October 22, 1994: The Hausladen Phenomenon and § 135.7  Untimely Filed Claims in Cases Filed after October 22, 1994.

 

16  See In re Mattera, 203 B.R. 565, 572 (Bankr. D.N.J. 1997) (Plan “provided for” condominium association by proposing to surrender time share. Title to the time share remained in the debtor. “That an obligation has been provided for in a Chapter 13 plan is ‘commonly understood to mean that a plan “makes a provision” for, “deals with,” or even “refers to” a claim.’ Rake v. Wade, 508 U.S. 464 [113 S. Ct. 2106, 124 L. Ed. 2d (1993),] . . . . [T]he debtor’s plan provided for the surrender of the two-week time-share . . . . The plan was confirmed and successfully completed. Although no formal action was taken by the debtor or the secured creditor to accomplish the ‘surrender’ of the premises, there is no question that the claim was ‘provided for’ under the Chapter 13 plan. . . .  [T]he successful completion of debtor’s Chapter 13 plan discharged the debt due from the debtor to the [condominium association] under 11 U.S.C. § 1328(a), for both pre-petition and post-petition assessments.” Association’s claim was discharged notwithstanding judgment in state court for postdischarge fees. “[T]he parties have not addressed the collateral estoppel impact of the entry of a judgment in state court against the debtor.”).

 

17  See § 135.5  Failure to File Proof of Claim, § 135.6  Untimely Filed Claims in Cases Filed before October 22, 1994: The Hausladen Phenomenon and § 135.7  Untimely Filed Claims in Cases Filed after October 22, 1994. See, e.g., In re Tomlan, 102 B.R. 790 (E.D. Wash. 1989) (IRS failed to meet the essential condition precedent to realizing priority status by failing to timely file a proof of claim. Debtor’s original plan provided for full payment of the IRS, and that plan was amended to provide for full payment of “allowed” priority claims after it appeared that the IRS had failed to timely file a proof of claim. The provision for payment in the plan was sufficient to “provide for” the claim of the IRS and thus the IRS claim is a dischargeable debt. The plan gave sufficient notice to the IRS to enable it to seek payment under the plan, and thus it was “provided for” in the plan.); Richards v. United States, 50 B.R. 339 (E.D. Tenn. 1985) (Tax claim never paid because not timely filed is discharged. The plan “provided for” payment though no payments were received by the creditor.); Cody v. Cody (In re Cody), 246 B.R. 597, 599–600 (Bankr. E.D. Ark. 1999) (Debt in the nature of property settlement that survived discharge in a prior Chapter 7 case was provided for and is dischargeable, notwithstanding that ex-spouse is disabled from receiving distributions because she failed to timely file a proof of claim. “Under the Bankruptcy Code, if the plan ‘provided for’ the debt in dispute, it is discharged. . . . The debtor proposed a chapter 13 plan with the filing of his petition which listed Gina Cody as an unsecured creditor. The plan, which provided generally for pro rata distribution to all unsecured creditors, was confirmed . . . . Gina Cody did not timely file a proof of claim in this case and there is no assertion that she did not have notice of the case. . . . A debt is provided for if the plan deals with it or refers to it. . . . Some courts indicate that if the schedules list the debt, the debt is provided for. . . . Even an estimated amount, so long as it is scheduled, is deemed to be provided for. . . . A plan which provides generally for payment of unsecured claims is considered to provide for such claims if the debts are listed in the schedules. . . . Payment of the claim, even a debt to a former spouse, is not required for a claim to be dischargeable. . . . The term ‘provided for’ in section 1328 encompasses the procedural due process requirements embodied in the Fifth Amendment to the U.S. Constitution. . . . In the instant case, the confirmed plan provided for payment of the debt in dispute. Having provided for the debt, if the debtor fulfills his obligations under the Bankruptcy Code by completing the plan and obtaining discharge of those ‘provided for’ debts, including the debt here in dispute, the debtor will be discharged of the debts, even those where payments cannot be made by the trustee because the creditor has failed to file a proof of claim.”); In re Hanson, 223 B.R. 775, 776, 778, 779 (Bankr. D. Or. 1998) (Plan that called for full payment of administrative expenses “provided for” payment of postconfirmation attorney fees, and unpaid postconfirmation attorney fees are discharged upon the completion of payment to other creditors where debtor’s attorney did not request approval of postconfirmation fees before the entry of discharge. Fee agreement with debtor’s attorney estimated attorney fees at $1,400 and provided for “billing and payment for legal work that exceeded the fee estimate, including fees not paid through the Chapter 13 plan.” Debtor’s counsel requested and was allowed the $1,400 and a supplemental fee of $277.25. Confirmed plan required the trustee to pay “the expenses of administration required by 11 U.S.C. § 507(a)(1).” After discharge, debtor’s attorney sent the debtor a letter demanding payment of $238 that had not been allowed by the bankruptcy court or paid through the plan prior to discharge. Court reasoned that § 507(a)(1) defines administrative expenses to include § 503(b) awards of compensation and reimbursement of expenses under § 330. “[E]xpenses of administration in Chapter 13 have long been understood to include debtor’s attorney fees . . . . Because postconfirmation attorney fees are administrative expenses, the plans’ provision for payment of administrative expenses includes payment of those fees.” The attorney argued that the unpaid compensation was not provided for by the plan because counsel never applied for approval of the compensation before discharge. The court described this argument as “essentially the same of creditors who contend that their claims are not provided for in a Chapter 13 plan if they do not file a proof of claim. Courts have routinely rejected such a construction, reasoning the ‘provided for’ means that ‘the plan makes a provision for the claim or deals with the claim or refers to the claim—not that the claim was actually paid.’ . . . [W]hen a creditor fails to file a proof of claim, the claim is nonetheless ‘provided for’ in the plan if it is within a class of claims referred to in the plan. The same reasoning applies to administrative claims. An administrative expense is defined by statute, not by whether the claimant chooses to file a claim, and the confirmed plans in these cases provided the sole mechanism for payment of administrative expenses.”); In re Carrillo, 215 B.R. 212, 213–17 (Bankr. N.D. Okla. 1997) (Claim of Oklahoma Employment Security Commission was discharged in prior Chapter 13 case where confirmed plan provided for OESC as a general unsecured claim holder, OESC filed an untimely proof of claim that was disallowed without distributions, and with full notice of its treatment under the prior plan, OESC did not object to confirmation. In re Escobedo, 28 F.3d 34 (7th Cir. 1994), is distinguishable because the creditor in Escobedo filed a timely proof of claim, OESC did not. OESC was scheduled as a creditor, and the plan provided that “creditors who fail to file a timely claim with the bankruptcy court clerk shall not receive any distribution under this plan unless otherwise ordered by the court.” Order confirming a plan recited, “All claims will be treated as set forth in the attached SCHEDULE OF PAYMENTS . . . all claims which are not otherwise specifically classified in said SCHEDULE OF PAYMENTS are determined to be General Unsecured Claims in this case.” OESC did not object to or appeal the order of confirmation. OESC filed its proof of claim four months after the required date and received no distributions under the prior plan. The debtor completed payments and received a discharge. In a second Chapter 13 case, OESC filed a proof of claim and argued that it was not discharged by the prior case. “[T]here is a procedural requirement imposed by Rule 3002 that mandates that a claim be filed within the time limits prescribed before a claim will be allowed under Section 502. The Confirmed Plan provided that claims filed after the deadline would not receive any payments. Because OESC did not meet this time limit, the First Claim was disallowed. The Debtors were not required to file an objection. . . . Even if the First Claim was not time barred, the record indicates that the First Claim would have been discharged in the First Case. . . . OESC had the opportunity to object to confirmation, but failed to do so and allowed the Confirmed Plan to be entered. It cannot now collaterally attack its treatment as a general unsecured creditor in the Confirmed Plan. . . . Because the First Claim was untimely, it was disallowed under Section 502, and therefore discharged by virtue of Section 1328(a). Even if this Court determined that the untimely claim could be allowed, however, OESC’s claim would have been discharged upon the completion of the Confirmed Plan in the First Case because it was deemed provided for by the Confirmed Plan as a general unsecured claim. Accordingly, OESC has no claim in the Second Case.”); Dixon v. United States (In re Dixon), 209 B.R. 535 (Bankr. W.D. Okla.) (Priority claim of IRS was “provided for” and discharged upon completion of payments notwithstanding that IRS failed to file a proof of claim and received no distributions. In a Chapter 13 case filed on April 9, 1993, 1992 tax was prepetition claim. IRS’s failure to file a proof of claim does not defeat plan provision for payment nor discharge under § 1328(a).), on reconsideration, 210 B.R. 610, 615 (Bankr. W.D. Okla. 1997) (“This court therefore holds that the liability of debtors in this case became payable, for purposes of § 1305(a)(1) immediately upon the close of the calendar year 1992, before the commencement of this case. Thus, the prepetition tax liability of debtors for that year could not have been the subject of a proof of claim by IRS under § 1305(a)(1), and the failure of the IRS to file a proof of claim under § 501(a) or to have one filed on its behalf under § 501(b) or (c) resulted in the personal liability of debtors for those taxes being discharged upon completion of payments under their confirmed Chapter 13 plan.”), aff’d, 218 B.R. 150, 152–53 (B.A.P. 10th Cir. 1998) (“The Debtor’s plan provided for the IRS’s claim to be paid, and it was not paid only because no proof of claim was filed. Except when a lack of notice to the creditor is involved, the reported decisions considering the question . . . have ruled such a claim is nevertheless ‘provided for’ by the plan within the meaning of § 1328(a) and is therefore discharged.”); Riley v. Arkansas Dep’t of Fin. & Admin. (In re Riley), 204 B.R. 28, 31–32 (Bankr. E.D. Ark. 1996) (Tax claims provided for in confirmed plan were discharged upon completion of payments notwithstanding that taxing authority failed to file proofs of claim. Confirmed plan provided for full payment of tax claims estimated at $17,000. After an audit, state of Arkansas determined that it was owed sales tax of $20,910.28, sales tax of $9,654, and withholding taxes of $245.65 and $452.53. State filed proofs of claim for withholding taxes but failed to file proofs of claim for sales taxes. “A debt is provided for if the plan deals with it or refers to it. . . . Even an estimated amount, so long as it is scheduled, is deemed [to] be provided for. . . . A plan which provides generally for payment of priority claims is considered to provide for such claims if the debts are listed in the schedules. . . . Payment of the claim, even a priority tax claim, is not required for the claim to be dischargeable. . . . The term ‘provided for’ in section 1328 encompasses the procedural due process requirements embodied in the Fifth Amendment to the U.S. Constitution. . . . In the instant case, the confirmed plan provided for payment of the priority debt in dispute. The modification continued to provide for funding of payment on the priority debts and the notice advised that priority creditors were unaffected by the modification. . . . The debt in dispute, although contemplated to be paid through the plan, was not paid because the [State] never filed a proof of claim for that debt. Having provided for the debt and having made his payments under the plan, the debtor fulfilled his obligations under the Bankruptcy Code such that he is entitled to his discharge of those ‘provided for’ debts, including the debt here in dispute.”); Thibodaux v. United States (In re Thibodaux), 201 B.R. 827, 830–31 (Bankr. N.D. Ala. 1996) (Taxes incurred by the debtor through a previous business were “provided for” where the debtor scheduled the IRS, the plan stated that it would pay all creditors 100% of allowed claims, and the plan was adequately funded. The IRS got notice and filed a proof of claim for personal income taxes but never filed a proof of claim for business taxes. “IRS had sufficient information to compute and file a claim against Thibodaux for $2,086.31 in income taxes. IRS had the debtor’s name, address and Social Security number. It should have been able to compute all the taxes owed by the debtor from its own records and file timely proofs of claim for all amounts due.” “‘[I]f a governmental unit is scheduled as a creditor holding an unsecured tax claim in an estimated or disputed amount, the claim is effectively provided for in the plan, since the plan will always provide for full payment of priority claims and will make some provision for all general unsecured claims. . . . The debt will be discharged if the debtor completes the plan. (emphasis added).’”); In re Jones, 164 B.R. 543, 546 (Bankr. N.D. Tex. 1994) (IRS claim for 100% penalty assessment filed 21 months late was discharged without payment because the plan “provided for” the claim, the IRS had notice of the plan, the plan was confirmed without objection from the IRS and the IRS failed to timely file a proof of claim. “The debtor placed the IRS in his schedules as an unliquidated and contingent claim. Its claim was then treated under the plan as being a $10 priority claim, which under the plan was to be paid in full. The IRS did not object to the confirmation of the plan. . . . The IRS did not file a timely proof of claim. . . . The IRS received bold-faced notice from the Court that: ‘CLAIMS WHICH ARE NOT FILED BY 05/24/89 WILL NOT BE ALLOWED EXCEPT AS OTHERWISE PROVIDED BY LAW.’ The IRS did not file its claim until . . . one year and nine months after the bar date for filing proofs of claims. Failure to file a timely proof of claim has generally been held to disallow the claim. . . . The debt was provided for in the plan . . . but the IRS did not receive payment due to its failure to properly file a proof of claim. As a result the debtor did complete his plan and properly received a discharge of the IRS debt.”); Washington v. Nissan Motor Acceptance Corp. (In re Washington), 158 B.R. 722 (Bankr. S.D. Ohio 1993) (Although lien of automobile-secured creditor is not avoidable where plan provides for full payment of secured claim, because creditor failed to file a proof of claim, unsecured portion of claim is discharged and any effort by lender to seek payment on account of such claim after all plan payments have been made and a discharge entered would be “barred by laches.”); In re Sorge, 149 B.R. 197, 202 (Bankr. W.D. Okla. 1993) (In a Chapter 11 case filed in 1985 and converted to Chapter 13 in 1989, tax liability for the prepetition years 1981, 1982 and 1983 is discharged in the Chapter 13 case without payment where the IRS failed to file a new proof of claim after conversion from Chapter 11. There being no provision of Bankruptcy Rule 1019 or any other rule relieving the IRS of the obligation to file a new proof of claim after conversion from Chapter 11 to Chapter 13, the failure to do so precludes allowance of any claim for prepetition taxes in the superseding Chapter 13 case. “Since the claims for 1981, 1982 and 1983 taxes were provided for in debtors’ amended plan, they were dischargeable under § 1328(a) after the completion by debtors of all payments under the plan. The fact that contemplated payments to IRS were not made, does not compel a different result. The IRS claims were not paid because they were not allowed. Any other result would create an anomalous result, wherein IRS would never be required to file proofs of claim in order to compel payment in full of its alleged priority claims. Had the Congress desired this result, . . . it could have so provided.”); Leber v. Illinois Dep’t of Revenue (In re Leber), 134 B.R. 911 (Bankr. N.D. Ill. 1991) (Plan “provided for” payment of Illinois Department of Revenue’s claim when plan provided that all claims entitled to priority under § 507 would be paid in full in deferred cash payments. Although Department of Revenue was not scheduled, Department was sent notice of the case by the bankruptcy clerk’s office. The Department had actual notice in ample time to timely file a proof of claim. Department waited two years until after the debtors received their discharge before asserting claim. To be dischargeable, the claim must be “provided for”—the plan must make a provision for the claim, deal with the claim or refer to the claim. Notice of the Chapter 13 case in time to file a timely proof of claim, coupled with a plan provision for payment, result in discharge of the tax claim.); Border v. IRS (In re Border), 116 B.R. 588, 595 (Bankr. S.D. Ohio 1990) (“[I]n order to share in plan payments, the IRS, like any other creditor, is required to file a proof of claim for any prepetition tax claim. If it does not, a priority tax claim that is properly scheduled and noticed and for which the Chapter 13 plan proposes full payment in compliance with 11 U.S.C. § 1322(a), will be discharged pursuant to § 1328(a) . . . upon completion of the plan, whether or not any funds are distributed to the IRS.”); Workman v. United States, 108 B.R. 826, 830 (Bankr. M.D. Ga. 1989) (IRS claim for 100% penalty for failure to pay employment taxes was “provided for” where the plan called for payment in full of all allowed claims entitled to priority and the IRS failed to have an allowed claim because it failed to timely file proof of its claim. “The IRS, like any other creditor, must timely file a proof of claim or be barred from participation in the plan. If the debtor’s plan makes provision for payment and a tax claim is not timely filed, the tax claim is discharged upon completion by the debtor of all payments required under the plan.”); Daniel v. United States (In re Daniel), 107 B.R. 798 (Bankr. N.D. Ga. 1989) (IRS claim is provided for and is discharged notwithstanding that no payments were made to the IRS where plan called for payment in full of priority claims and IRS failed to timely file a proof of claim. The phrase “provided for” in § 1328(a) simply requires that for a claim to become dischargeable, the plan must “make a provision for” it, that is, deal with it or refer to it.); In re Ungar, 104 B.R. 517 (Bankr. N.D. Ga. 1989) (To be discharged, tax claim need not be paid through Chapter 13 plan, but plan must “provide for” the tax claim by dealing with the claims or referring to the claims. Debtors’ plan originally included payment of tax debts, but plan was amended to provide that the debtors would handle tax claims “out of court.” Under these circumstances, the plan did not actually make provision for the IRS, and a precondition to discharge of tax claims is absent.); In re Miller, 100 B.R. 898 (Bankr. N.D. Ohio 1989) (Tax claim was provided for in the debtor’s prior Chapter 13 plan and was discharged upon completion of payment to other creditors where IRS failed to file a timely proof of claim. A Chapter 13 plan provides for the payment of a tax claim even though such claim is not paid due to the failure of the IRS to timely file a proof of claim.); In re Ryan, 78 B.R. 175 (Bankr. E.D. Tenn. 1987) (IRS claim for prepetition taxes is provided for where the plan provides for full payment of priority unsecured claims, notwithstanding that the debtor did not schedule the IRS by name. Plan does not have to specifically name a governmental creditor in order to provide for claim. If governmental unit is scheduled as a creditor in an estimated or disputed amount, the claim is provided for in the plan. Tax claim is discharged because “provided for” in the plan notwithstanding that IRS received no payment because of failure to file a timely proof of claim.); United States v. Vlavianos, 71 B.R. 789 (Bankr. W.D. Va. 1986) (Chapter 13 plan that proposes to make all priority payments required under § 507 does “provide for” the payment of the IRS’s claim within the meaning of § 1328(a), and thus the balance of the IRS’s claim is discharged upon completion of payments under the plan when the IRS failed to amend its claim until more than a month after all payments under the plan had been completed. Actual payment of a claim, even a priority tax claim, is not required for discharge under § 1328(a) as long as payment of the claim is provided for by the plan.); Newcomb v. United States, 60 B.R. 520 (Bankr. W.D. Va. 1986) (Claim of the IRS was “provided for” by the plan where the debtor scheduled the IRS and filed proof of the IRS’s claim as permitted by Bankruptcy Rule 3004. The IRS did not receive full payment because it omitted tax penalties when it amended the debtor’s proof of claim. The omitted tax penalties would be dischargeable; however, prior to discharge, the IRS can again amend its proof of claim to include the omitted penalties.); In re Goodwin, 58 B.R. 75 (Bankr. D. Me. 1986).

 

18  See § 358.1 [ On Liens ] § 162.3  On Liens. See also discussion of the free and clear effect of confirmation on liens in § 231.1 [ 11 U.S.C. § 1327(c): Free and Clear Effect on Liens ] § 120.4  11 U.S.C. § 1327(c): Free and Clear Effect on Liens and the failure to provide for a claim in § 234.1 [ Failure to Provide For ] § 121.3  Failure to Provide For.

 

19  11 U.S.C. § 502(b)(9). See § 132.2  In General: Filing is Required for Allowance, § 135.1  Timing, Procedure and Evidence Presumption, § 135.6  Untimely Filed Claims in Cases Filed before October 22, 1994: The Hausladen Phenomenon and § 135.7  Untimely Filed Claims in Cases Filed after October 22, 1994.

    Perhaps of only historical interest, in Chapter 13 cases filed before the 1994 amendments, when a creditor filed an untimely proof of claim, the Bankruptcy Code was less clear whether the debt was discharged upon completion of payments under the plan. As detailed elsewhere, see § 289.1 [ Untimely Filed Claims in Cases Filed before October 22, 1994: The Hausladen Phenomenon ] § 135.6  Untimely Filed Claims in Cases Filed before October 22, 1994: The Hausladen Phenomenon, there was much controversy whether tardily filed proofs of claim were disallowed in Chapter 13 cases filed before § 502(b)(9) became effective on October 22, 1994. If a tardily filed claim was allowable, the second predicate for discharge—disallowance under §  502—was missing, and the tardy claim could be discharged upon completion of payments only if the claim was provided for by the plan.

    Determining when a debtor was entitled to discharge and when payments were completed under the plan was complicated in a district that did not disallow tardy claims in pre-1994 cases. For example, in In re Friauf, 172 B.R. 273 (Bankr. D. Minn. 1994), the confirmed plan provided for payment in full of priority claims as required by § 1322(a)(2). The IRS “purposefully” waited four and one-half years after the petition to file its proof of claim. Friauf arose in the District of Minnesota—a district in which the tardy filing of claims was not a ground for disallowance. See § 289.1 [ Untimely Filed Claims in Cases Filed before October 22, 1994: The Hausladen Phenomenon ] § 135.6  Untimely Filed Claims in Cases Filed before October 22, 1994: The Hausladen Phenomenon. The court faced the dilemma that the plan provided for the IRS, and thus its claim would be discharged at the completion of payments, but because of the late filing, payment of other creditors would be completed long before payment in full of the IRS. To avoid rewarding the IRS for purposefully filing a late claim, the court accommodated the debtor’s right to discharge with allowance of the IRS’s tardy claim by creatively defining completion of payments under the plan:

[T]he plan originally filed provided for payment in full of priority claims as required by § 1322(a). It met the standards for confirmation. Now that the IRS has filed its claim it is entitled to be paid on a priority basis until such time as Debtor completes payments under the plan. As soon as Debtor completes payments under the plan, however, she is entitled to a discharge of all debts “provided for” by the plan. . . . Debtor will complete her payments under the plan before she pays all priority claims in full. This is not the fault of the Debtor. Rather, it is due to the extreme and purposeful delay of the IRS in filing its claim. A plain reading of sections 1322(a) and 1328(a) of the Bankruptcy Code compels the conclusion that, while the IRS is entitled to be paid on a priority basis, in futuro, Debtor is entitled to a discharge once she has made all payments under the plan.

172 B.R. at 276. Accord In re Black, 172 B.R. 271 (Bankr. D. Minn. 1994).

    Friauf was a tough case that (thankfully) could only arise in a district that allowed tardily filed claims and then only in cases filed before October 22, 1994. The debtor in Friauf was entitled to discharge the IRS’s claim because it was provided for by the plan. However, it is hard to explain how the debtor could complete payments under the plan and become entitled to a discharge under § 1328(a) without satisfying the plan provision for payment in full of priority claims. Friauf gave the debtor the better of this dilemma and punished the IRS for its purposefully tardy claim.

 

20  See 11 U.S.C. § 1328(a)(1)–(3).

 

21  See § 284.1 [ Amended Claims ] § 133.4  Amended Claims.

 

22  134 B.R. 370 (Bankr. D. Neb. 1991).

 

23  See § 133.2  Unscheduled Creditors before BAPCPA and § 133.3  Unscheduled Creditors after BAPCPA.

 

24  See Hairopoulos v. United States, 193 B.R. 889, 892–93 (E.D. Mo. 1996) (After conversion from Chapter 7 to Chapter 13, IRS was not “provided for” for purposes of discharge because IRS did not become aware of the conversion or of the deadline for filing proofs of claim until after confirmation and after the bar date. “A debt omitted from a chapter 13 plan and chapter 13 statement is therefore not ‘provided for by the plan’ and is not discharged under section 1328(a). . . . This Court would agree with the bankruptcy court’s finding that debtor’s chapter 13 plan ‘deals with’ the IRS claim if, in fact, the IRS had received proper notice. Section 2(b) [of the plan] states that the remaining payments should be applied to satisfy unsecured debts ‘[a]fter payment in full of all . . . priority claims . . . .’ The IRS tax claim fits into 11 U.S.C. § 507(a)(7)’s definition of a ‘priority claim.’ . . . [I]t is clear from the record that the debtor did not prove that the IRS had actual knowledge of the debtor’s chapter 13 until February of 1990. . . . [O]n this set of facts, the IRS claim was not provided for under the plan because notice to the IRS was insufficient.”), aff’d, 118 F.3d 1240, 1243–46 (8th Cir. 1997) (“A debt is ‘provided for’ by a Chapter 13 plan where the plan acknowledges the debt, even if the plan does not propose to make any payments on the claim. . . . [F]urther, in order to provide for an unsecured tax claim, the plan itself does not always have to specifically name the governmental creditor. Instead, it may be ‘sufficient if the plan provides for full payment of priority unsecured claims and payment of some percentage on nonpriority unsecured claims.’ . . . However, a claim cannot be considered to have been provided for by the plan if a creditor does not receive proper notice of the proceedings. . . . Both statutory and constitutional implications arise when a creditor fails to receive adequate notice of the bankruptcy proceedings. . . . [W]e conclude that any ‘notice’ given in this case was insufficient to satisfy due process and fundamental fairness. As such, the taxes were not ‘provided for’ by the plan and were therefore not discharged under § 1328(a).”); In re Moore, 247 B.R. 677, 685–86 & n.8 (Bankr. W.D. Mich. 2000) (In dicta, “minimum due process requirement” for discharge includes that unscheduled creditors have an opportunity to receive distributions under the confirmed plan. “[I]t is fair to assume that each of the Debtors intended to discharge as many creditors as legally possible . . . . [T]he intended scope of each of these plans is all creditors who received sufficient notice of the Debtor’s bankruptcy to meet the minimum due process requirements necessary to discharge their claims under Section 1328(a). . . . However, adding creditors to these schedules at a later date and then giving them notice is not sufficient. The court does not question the Debtors’ right to freely amend their schedules at any time prior to the close of the case. Fed. R. Bankr. P. 1009(a). The problem is that amending the schedules is simply not enough to overcome the due process rights of these omitted creditors. Late notice of the Chapter 13 proceeding is meaningless unless the omitted creditor is also allowed the opportunity to receive a distribution under the confirmed plan.” Creditors noticed after confirmation of the plan can participate in distributions either by filing a late proof of claim to which no objection is filed or when the debtor files a claim on behalf of the creditor under Bankruptcy Rule 3004. “It is possible that an omitted creditor who declines to file a late proof of claim after receiving notice of the bankruptcy might still be subject to the Section 1328 discharge under a plan which provides for any creditor who has filed an allowed claim. . . . [I]t certainly would behoove an omitted creditor to take such a possibility into consideration when it is deciding whether to file a late claim or not, particularly when the debtor is encouraging it to do so.”); In re Rodriguez, 225 B.R. 628, 631–32 (Bankr. S.D. Tex. 1998) (Arguably in dicta in the context of a debtors’ proposed postconfirmation modification to add an unlisted unsecured creditor after the bar date for filing proofs of claim, court holds that unlisted creditor is not provided for by the plan and cannot be disallowed even if a proof of claim is filed. Plan confirmed in February of 1995 provided for 60 months of payments and a 22% distribution to a class of unsecured creditors listed by name. The Solises were prepetition unsecured claim holders who were not scheduled and were not listed in the plan. In April of 1998, the debtors moved to modify the plan to add the Solises’ claim. The Solises responded with a motion for relief from the stay to proceed with collection in state court. In the course of conditionally granting the debtors’ motion to modify, court observed, “Since [the Solises] did not have notice or knowledge of this case prior to the proof of claim deadline, their claim cannot be disallowed for failure to file a timely proof of claim. Unless the plan is amended, therefore, [the Solises’] disputed, unliquidated, unsecured claim will not be discharged in this bankruptcy case because it was not provided for in the original plan and because the claim cannot be disallowed under § 502. . . . It does not necessarily follow that a creditor’s claim can be provided for in a chapter 13 plan merely because the creditor is listed in the schedules. . . . [G]enerally an unsecured creditor must file a proof of claim to be provided for in the plan.” In a footnote, the court explained that a claim that cannot be timely filed because the creditor did not have notice of the bankruptcy case cannot be disallowed because of equitable and constitutional considerations.); Southtrust Bankcard Ctr. v. Curenton (In re Curenton), 205 B.R. 967, 971 (Bankr. M.D. Ala. 1995) (Claim is not “provided for” and not discharged because debtor listed incorrect address and gave notice to local branch office rather than to bank’s credit card subsidiary. “This court holds that any debt not adequately listed in debtor’s schedules is not ‘provided for by the plan.’ . . . [T]his court is controlled by the Eleventh Circuit decision of In re Spring Valley Farms, Inc., 863 F.2d 832 (11th Cir. (Ala.) 1989). . . . Chapter 13, like Chapter 11, has a very broad discharge provision, a provision which, on its face, acts to relieve the debtor of an unscheduled debt; however, to do so prevents a creditor’s due process right to notice and an opportunity to be heard.”); Crites v. Oregon (In re Crites), 201 B.R. 277, 281–82 (Bankr. D. Or. 1996) (Unscheduled creditor was not “provided for” and thus not discharged. In prior Chapter 7 case, judgment was entered against the debtor in favor of the Oregon Bureau of Labor and Industries for $21,707. The debtor filed a Chapter 13 petition three weeks later but did not list the Bureau of Labor and Industries as a creditor. Plan provided no payment to general unsecured creditors. Debtor completed payments, and a discharge was entered. The Bureau of Labor and Industries then garnished the debtor’s wages. “[F]or an allowed claim to be discharged through Chapter 13 it must be ‘provided for’ in the plan. The Ninth Circuit has defined the term ‘provided for’ as used in several sections of Chapter 13 to mean that the plan must ‘make a provision for it, i.e., deal with it or refer to it.’ In re Gregory, 705 F.2d 1118 (9th Cir. 1983). In this case paragraph 2(d) of the debtor’s plan while not listing specific creditors by name, states that general unsecured creditors will receive no payments under the plan. . . . [T]he Ninth Circuit definition of ‘provided for’ as used in Chapter 13 perforce includes notice to creditors which is sufficient to provide them with the opportunity to timely participate in the procedural rights granted to them in that chapter. . . . [T]he seemingly unpretentious two word phrase, ‘provided for’, encompasses the procedural due process requirements of the 5th Amendment to the United States Constitution. . . . BOLI’s claim, not having been provided for in the debtor’s Chapter 13 plan, was not discharged when the court granted the debtor his discharge under 11 U.S.C. § 1328(a).”); Drimmel v. Moran (In re Drimmel), 143 B.R. 249 (Bankr. D. Mont. 1992) (Restitution is not “provided for by the plan” and is not dischargeable under § 1328(a) when case was filed before the criminal complaint was filed by the state of Montana. The state was not scheduled as a creditor and did not receive notice of the plan or the order of confirmation.); Avery v. United States, 134 B.R. 447 (Bankr. N.D. Ga. 1991) (IRS is “provided for” and is bound by confirmation when the plan provided for full payment to all creditors having priority claims. However, the IRS did not get notice in time to file a timely proof of claim. Although the IRS is bound by the plan and is stayed during the life of the plan, the IRS claim will not be discharged upon completion of payments under the plan. Court exercises “its equitable powers under 11 U.S.C. § 105(a)” to allow the IRS to file a late proof of claim.); In re Scott, 119 B.R. 818 (Bankr. M.D. Ala. 1990) (Creditor without notice or knowledge of Chapter 13 case that is not listed in the schedules, is not on the mailing matrix and is not in the plan as a creditor is not “provided for by the plan” and is not discharged. The creditor may be required to wait until the automatic stay lifts before it can proceed to collection, but its claim will be nondischargeable.); In re Tipton, 118 B.R. 12 (Bankr. D. Conn. 1990) (Debtor’s failure to schedule the creditor or to give the creditor notice of the bar date in time for it to file a timely proof of claim “forecloses the possibility that [the creditor’s] claim can be provided for by a Chapter 13 plan.”); In re Pack, 105 B.R. 703 (Bankr. M.D. Fla. 1989) (Debt is not provided for and is not discharged when debtor fails to list creditor, creditor received no notice of the bankruptcy until after the claims bar date and creditor was precluded from participation in the plan by the debtor’s actions.); In re Schroff, 94 B.R. 279 (Bankr. E.D.N.Y. 1988) (Debt is not “provided for” in the Chapter 13 plan and is not discharged under § 1328(a) when the debtor intentionally did not list certain lienholders and other creditors in the original schedules.); In re Chirillo, 84 B.R. 120 (Bankr. N.D. Ill. 1988) (Arguably in dicta, creditor not listed in Chapter 13 statements and schedules that had no notice in time to file a proof of claim holds a claim that is not dischargeable. Court cites 11 U.S.C. § 523(a)(3), a section not applicable at discharge after completion of payments under § 1328(a).).

 

25  In re Dunn, 83 B.R. 694 (Bankr. D. Neb. 1988).

 

26  Southtrust Bank of Ala. v. Gamble (In re Gamble), 85 B.R. 150 (Bankr. N.D. Ala. 1988).

 

27  See Leber v. Illinois Dep’t of Revenue (In re Leber), 134 B.R. 911 (Bankr. N.D. Ill. 1991) (Plan “provided for” payment of Illinois Department of Revenue’s claim when plan provided that all claims entitled to priority under § 507 would be paid in full in deferred cash payments. Although Department of Revenue was not scheduled, Department was sent notice of the case by the bankruptcy clerk’s office. The Department had actual notice in ample time to timely file a proof of claim. Department waited two years until after the debtors received their discharge before asserting claim. To be dischargeable, the claim must be “provided for”—the plan must make a provision for the claim, deal with the claim or refer to the claim. Notice of the Chapter 13 case in time to file a timely proof of claim, coupled with a plan provision for payment, result in discharge of the tax claim.); In re Glow, 111 B.R. 209 (Bankr. N.D. Ind. 1990) (Claim is “provided for” and is discharged upon completion of all payments under the plan when counsel for the creditor had actual knowledge of the bankruptcy in time to timely file a proof of claim. Although the original address for the creditor in the debtor’s statements was in error and the first § 341 hearing was not properly noticed to the creditor, the continued § 341 hearing was properly noticed and the creditor’s attorney had actual knowledge of the bankruptcy in time to have inquired to determine the bar date for the filing of claims.).

 

28  238 B.R. 747 (Bankr. N.D. Ill. 1999).

 

29  238 B.R. at 755–57. Accord Ruxton v. City of Phila., 240 B.R. 211, 213–14 (Bankr. E.D. Pa. 1999) (Tax lien of city was not upset by completion of payments under plan that “mischaracterized” the city as the holder of a priority claim and made no provision for payment of the city’s secured claim for realty taxes. Debtors “mischaracterized as priority, a payment to the City of Philadelphia in the amount set forth in its claim as secured . . . . No separate payment to the City of Philadelphia for real estate taxes was provided in the amended plan. . . . There was no issue in [In re Szostek, 886 F.2d 1405 (3d Cir. 1989)], as there is here, over whether the Debtors’ chapter 13 plan in fact made provision for the treatment of a creditor[’]s secured claim. . . . [N]o reasonable reading of the Debtors’ amended Chapter 13 plan permits an interpretation that this amended plan covers both priority and unsecured water and sewer charges, and secured real estate taxes. . . . It is well established that the holder of a secured claim need not file a proof of claim at all, but instead may elect to have its lien pass through a bankruptcy case unaffected. . . .  Whether through inadvertence or design, the City is in this position.”), aff’d, 246 B.R. 508 (E.D. Pa. 2000); United States v. Trembath (In re Trembath), 205 B.R. 909, 912–14 (Bankr. N.D. Ill. 1997) (Claims for withholding tax liabilities of debtors’ businesses are not discharged notwithstanding plan provision for payment in full because debtors did not complete statements and schedules in a manner that permitted IRS to identify the debtors’ tax liabilities. “Both of the debtors’ plans provided that ‘[a]ll claims entitled to priority under 11 U.S.C. Section 507 shall be paid in full in deferred cash payments. . . .’ The debtors’ correctly state that a majority of courts have concluded that the above quoted plan provision satisfies the requirement that a plan provide for payment of the taxes, provided the tax creditor was scheduled or had notice of the bankruptcy case. . . . Here, the concealment of the prior business operations was equivalent to failure to give notice of the pending bankruptcy petition since it precluded the IRS from tying the debtors’ contingent liabilities for the trust fund taxes to the entity with primary responsibility for payment. Where the petition does not give the creditor sufficient notice to allow the creditor to determine that a debt exists, it would be inconsistent with notions of due process and fundamental fairness to hold that the debt was ‘provided for by the plan.’ . . . [N]otices of the individual cases were insufficient to satisfy due process and fundamental fairness.”).

 

30  See § 36.4  List of Creditors and Addresses, § 36.11  Schedule D—Secured Claims, § 36.12  Schedule E—Priority Claims, § 36.13  Schedule F—Unsecured Claims, § 36.22  Statement of Financial Affairs, § 133.2  Unscheduled Creditors before BAPCPA and § 133.3  Unscheduled Creditors after BAPCPA.

 

31  See Hairopoulos v. United States, 118 F.3d 1240, 1244 n.3 (8th Cir. 1997) (“Although the government does not have a constitutional right to due process, courts have construed the notice requirements of the bankruptcy code to apply to ‘all creditors,’ vesting the government ‘with a right akin to due process.’ . . . The legislative history of the notice requirement in 11 U.S.C. § 342 provides that ‘[d]ue process will certainly require notice to all creditors. . . . State and Federal governmental representatives responsible for collecting taxes will also receive notice.’”).

 

32  See 118 F.3d at 1245 (“While we recognize that in some circumstances a creditor may be discharged because it failed to properly further inquire once it had some notice of bankruptcy proceedings, the focus of the due process inquiry is on ‘the duty of the debtor [or in this case the bankruptcy court] to give notice of the relevant case, not on the relative ease with which a creditor can obtain the information without such notice.’”).

 

33  See 118 F.3d at 1245 (Citing Lawrence Tractor Co. v. Gregory (In re Gregory), 705 F.2d 1118 (9th Cir. 1983), for the proposition that “when the holder of a claim ‘receives any notice from the bankruptcy court that its debtor has initiated bankruptcy proceedings, it is under constructive or inquiry notice that its claim may be affected.’”).

 

34  Some courts of appeals have debated for years whether the reason a debtor fails to schedule a creditor is relevant to the exception to discharge in § 523(a)(3) applicable in Chapter 7 and individual Chapter 11 cases. See Zimhelt v. Madaj (In re Madaj), 149 F.3d 467 (6th Cir. 1998); Soult v. Maddox (In re Soult), 894 F.2d 815 (6th Cir. 1990); Rosinski v. Boyd (In re Rosinski), 759 F.2d 539 (6th Cir. 1985).

 

35  See § 356.1 [ Revocation of Discharge and Relief from Discharge Order ] § 161.2  Revocation of Discharge and Relief from Discharge Order.

 

36  See above in this section, and see § 161.2  Revocation of Discharge and Relief from Discharge Order. See also § 121.2  Notice and Due Process Considerations, Including Claims Allowance and Valuation, § 133.2  Unscheduled Creditors before BAPCPA and § 133.3  Unscheduled Creditors after BAPCPA.

 

37  See § 356.1 [ Revocation of Discharge and Relief from Discharge Order ] § 161.2  Revocation of Discharge and Relief from Discharge Order. See also § 223.1 [ Relief from Confirmation Order: Bankruptcy Rules 9023 and 9024 ] § 117.2  Relief from Confirmation Order: Bankruptcy Rules 9023 and 9024.

 

38  See § 357.1 [ In General, Including Discharge Hearing and Discharge Injunction ] § 162.1  In General, Including Discharge Hearing and Discharge Injunction.

 

39  See Vasser, Dischargeability of an Unknown and Unscheduled Debt under Chapter 13, 5 Norton Bankr. L. Adviser 5 (1992).

 

40  11 U.S.C. § 342(c), as amended by Bankruptcy Reform Act of 1994, Pub. L. No. 103-394, § 225, 108 Stat. 4106 (1994).

 

41  Fed. R. Bankr. P. 7004, as amended by Bankruptcy Reform Act of 1994, Pub. L. No. 103-394, § 114, 108 Stat. 4106 (1994).

 

42  See § 351.1 [ Long-Term Debts ] § 158.7  Long-Term Debts.

 

43  See § 53.10  Make Payments to Creditors Unless Plan or Confirmation Order Provides Otherwise, § 54.6  Compensation on Direct Payments by Debtor, § 74.8  Direct Payment of Secured Claims by Debtor before BAPCPA, § 74.9  Direct Payment of Secured Debt after BAPCPA, § 85.6  Direct Payment of Mortgage or Payment by Trustee and § 89.1  Direct Payments by Debtor.

 

44  The possibility that a claim paid directly by the debtor would be discharged at the completion of payments to other creditors, but before full payment, has been cited as one reason why debts paid directly by the debtor cannot be paid over a longer period of time than payments to other creditors through the plan. See In re Javarone, 181 B.R. 151, 155 (Bankr. N.D.N.Y. 1995) (Although long-term debts provided for under § 1322(b)(5) are not discharged at the completion of payments to other creditors, mortgage that is modified under § 1322(b)(2) by re-amortization over 10 years would suffer discharge at the completion of payments to other creditors, notwithstanding that the loan would not yet be paid in full. “Debtors’ First Amended Plan provides for the Eighth Ave. loan, but the loan will not be satisfied until well after the last payment under the plan. Arguably, Debtors would be entitled to discharge the payments remaining on NBT’s Eighth Ave. loan after the last payment under the plan. The payments due after the plan would not be excepted from discharge as NBT’s Eighth Ave. loan was modified pursuant to Code § 1322(b)(2) and not cured under Code § 1322(b)(5). See Code § 1328(a)(1). Such a result was neither intended by Congress nor would it be equitable. Therefore, the Court finds that Debtors’ proposed Code § 1322(b)(2) modification of NBT’s Eighth Ave. loan is impermissible.”).

 

45  See § 351.1 [ Long-Term Debts ] § 158.7  Long-Term Debts.

 

46  252 B.R. 509 (Bankr. D. Colo. 2000).

 

47  252 B.R. at 513–14.

 

48  See §§ 119.1 [ In General: Claims That Are Not Secured Only by Security Interest in Real Property That Is the Debtor’s Principal Residence ] § 80.1  In General: Claims That Are Not Secured Only by Security Interest in Real Property That Is the Debtor’s Principal Residence and 122.1 [ Rental Property, Farmland and Other Income-Producing Property ] § 80.6  Rental Property, Farmland and Other Income-Producing Property.

 

49  See also §§ 59.1 [ Make Payments to Creditors Unless Plan or Confirmation Order Provides Otherwise ] § 53.10  Make Payments to Creditors Unless Plan or Confirmation Order Provides Otherwise and 147.1 [ Direct Payment of Mortgage or Payment by Trustee ] § 85.6  Direct Payment of Mortgage or Payment by Trustee.

 

50  See, e.g., Drimmel v. Moran (In re Drimmel), 143 B.R. 249 (Bankr. D. Mont. 1992) (Restitution obligation that arose 16 months after the petition was not a “debt” for purpose of the Chapter 13 case. Although the debtor provided for payment of the victim’s claim through the plan, the debtor’s plan did not “provide for” the restitution obligation owed to the state that arose after confirmation.); In re Perry, 131 B.R. 763 (Bankr. D. Mass. 1991) (Nondebtor spouse’s contingent rights to debtor’s property, under Massachusetts law, do not constitute a claim in bankruptcy and thus are not dischargeable in a Chapter 13 case, nor does the nondebtor spouse participate with other claims in any distribution in the case.).

 

51  See § 359.1 [ On Administrative Expenses ] § 162.5  On Administrative Expenses.

 

52  See § 350.1 [ Postpetition Claims ] § 158.6  Postpetition Claims.