Some creditors are not entitled to postpetition interest on their claims. For example, general unsecured creditors typically don’t get postpetition interest pursuant to 11 U.S.C. § 502(b)(2).
Other creditors are entitled to postpetition interest.
I. Interest On Unsecured Priority Taxes
A. Chapter 11
For example, in Chapter 11 taxing authorities are entitled to postpetition interest on their unsecured priority claims. See, e.g., § 1129(a)(9)(c), IRM 126.96.36.199.1.3(6)., and IRS pub. 908 at pages 26-27.
B. Chapter 13
However, the IRS is not entitled to postpetition interest on unsecured priority claims in Chapter 13, unless the debtor has sufficient disposable income to pay the interest. 11 U.S.C. § 1322(b)(1) and IRM 188.8.131.52.1.3(5).
Continue Reading Payment of Postpetition Interest in Chapter 11 and Chapter 13 Plans