Household Finance Corp. v. Matula (In re Matula)

HAL J. BONNEY, Jr., Bankruptcy Judge.

May a creditor pursue a non-bankruptcy co-debtor for that portion of the debt the creditor will not receive under the debtors’ Chapter 13 plan?

The Matulas filed a Chapter 13 bankruptcy petition on April 21, 1980, whose plan proposes to pay the unsecured creditors twenty percent [20%] of claims duly proved and allowed. The debtors’ plan was confirmed on June 13th.

On November 3,1980, Household Finance Corporation filed a complaint for relief from the automatic stay preventing pursuit of co-debtors imposed by 11 U.S.C. § 1301. The creditor argues that it…