PETER McNIFF, United States Bankruptcy Judge.
THIS MATTER came before the court for hearing on November 8, 1994, on the debtors' Motion to Confirm First Amended Chapter 13 Plan and the objection of the standing chapter 13 trustee, Sharon A. Dunivent. Ken McCartney appeared for the debtors and Sharon A. Dunivent appeared personally. The court, being fully informed, finds and concludes as follows:
The debtors classified a government guaranteed student loan separately from other unsecured claims pursuant to
11 U.S.C. § 1322 (b)(1), and proposed to pay that claim 100% over the life of the plan, while proposing to pay the other unsecured creditors eight percent (8%) of their claims. The trustee objected to this treatment as unfair and discriminatory and not within the contemplation of § 1322(b)(1).
The first issue is whether the government, as a guarantor of this obligation, is an individual liable on consumer debt with the debtor. The court concludes that the government is not such a codebtor, entitling the debtor to separately classify this claim in accordance with § 1322(b)(1).
However, the debtors argue that such a finding does not preclude them from otherwise separately classifying and treating this obligation differently from the other unsecured claims. The court finds that the nondischargeable student loan may not be repaid in full over the life of the plan, while the remaining nonpriority unsecured creditors receive only eight percent (8%) of the amount of their claims, and finds that such treatment unfairly discriminates against those unsecured creditors.
It is, therefore, ORDERED that the Motion to Confirm the First Amended Chapter 13 Plan is denied. The debtors may submit, within 20 days of this order, another amended plan in accordance with the foregoing for the court's consideration.