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10/20/87 American Nickeloid v. Ann Pyzska

October 20, 1987

AMERICAN NICKELOID EMPLOYEE CREDIT UNION, PLAINTIFF-APPELLEE

v.

ANN PYZSKA, DEFENDANT-APPELLANT



APPELLATE COURT OF ILLINOIS, THIRD DISTRICT

515 N.E.2d 328, 162 Ill. App. 3d 84, 113 Ill. Dec. 519 1987.IL.1565

Appeal from the Circuit Court of La Salle County; the Hon. James Lanuti, Judge, presiding.

APPELLATE Judges:

JUSTICE HEIPLE delivered the opinion of the court. BARRY, P.J., and STOUDER, J., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE HEIPLE

Ronald Pyzska and his mother, the defendant herein, cosigned a promissory note to secure a loan they obtained from the plaintiff, American Nickeloid Employee Credit Union. The promissory note provided that the loan was payable in monthly installments thereafter, including interest computed at 12% per annum. On April 29, 1982, Ronald Pyzska filed a chapter 13 bankruptcy proceeding. A plan was filed and confirmed on June 21, 1982. The plaintiff filed its proof of claim in the bankruptcy proceeding in the amount of $7,380.01, representing the total amount due and owing on the promissory note as of the date the plan went into effect. On September 16, 1985, the trustee's final report was approved, and Ronald Pyzska was discharged. The report showed that the plaintiff had been paid $7,380.01.

On June 26, 1986, the plaintiff sued the defendant for the alleged balance due on the note for interest which accrued during the pendency of the bankruptcy proceedings, interest on that amount, and attorney fees. The trial court granted judgment in favor of the plaintiff and awarded costs. The defendant appeals. We affirm.

The defendant first argues that the interest on the note stopped accruing on the date the petition in bankruptcy was filed. Though the interest did stop accruing as to Ronald Pyzska, the bankrupt, it did not stop accruing as to the defendant. The protective provisions in the Bankruptcy Code which usually serve to stop the post-petition accrual of interest are not applicable to the defendant, because the Bankruptcy Code is not intended to benefit parties other than the bankrupt. (First National Bank v. Carlton (1987), 156 Ill. App. 3d 880.) Additionally, the Bankruptcy Code specifically states:

"Except as provided in subsection (a)(3) of this section, discharge of a debt of the debtor does not affect the liability of any other entity on, or the property of any other entity for, such debt." 11 U.S.C.A. sec. 524(e)(1979).

Alternatively, the defendant argues that interest stopped accruing as to her pursuant to 11 U.S.C.A. sec. 1301, which provides in pertinent part:

"Sec. 1301 Stay of Action Against Codebtor

(a) Except as provided in subsections (b) and (c) of this section, after the order for relief under this chapter, a creditor may not act, or commence or continue any civil action, to collect all or any part of a consumer debt of the debtor from any individual that is liable on such debt with the debtor, or that secured such debt, unless --

(1) such individual became liable on or secured such debt in the ordinary course of such individual's business; or

(2) the case is closed, dismissed, or converted to a case under chapter 7 or 11 of this title." (11 ...


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