State of Wisconsin Department v. Antonio Terrell

Summary

The Seventh Circuit held that a Chapter 13 debtor cannot exclude non-dischargeable student loan debt from a plan without providing for its payment under § 1322(b)(5), as such debt constitutes a priority claim that must be treated. The court affirmed the bankruptcy court's modification of the plan to require payment of the student loan debt over the plan's life, rejecting the debtor's argument that the motion to modify was untimely under Rule 71B(c) because the debtor failed to show excusable neglect for the late filing. The opinion also clarifies that the bankruptcy court retains authority to modify a plan to ensure fair treatment of student loan creditors, even if the debtor's original plan ignored them.

Questions Presented

1. Whether the bankruptcy court had authority to modify the plan's treatment of the Wisconsin Department's priority claim.
2. Whether the plan was proposed in good faith.