several cases since that time have reversed the Ron Pair decision and specifically state in their decisions that the Ron Pair decision was misconstrued or interpreted wrongly. IN RE LAGUNA, 944 F.2d 542 (9th Cir. 1991) is a case in which the debtors fell six months behind in their mortgage payments on their home. The debtors submitted a Chapter 13 plan that proposed to resume all current payments to SLMC while paying off the arrearages over a period of not more than 36 months. The lender, SLMC, objected to confirmation of the plan, arguing that it failed to provide for postpetition interest on the prepetition arrearages, in violation of 11 U.S.C. 506(b), 1322(b)(2), and 1325(a)(5), as recently interpreted by the Supreme Court in United States v. Ron Pair Enters., as well as the Fifth Amendment. The bankruptcy court overruled SLMC's objection and confirmed the plan, noting that neither the debtors' promissory note nor their deed of trust provided for any interest on arrearages. SLMC appealed to the Ninth Circuit Bankruptcy Appellate Panel ("BAP") which affirmed, with one judge dissenting, in a published opinion. [Shearson Lehman Mortgage Corp. v. Laguna (In re Laguna), 114 B.R. 214 (9th Cir. BAP 1990).] SLMC appealed to the Ninth Circuit Court, but the appeals court affirmed the judgment of the lower courts, thus reversing the decision in the Ron Pair case. This allows debtors to have a period when they do not have to pay additional interest on the debts that they were not able to pay before they filed for bankruptcy.ConclusionSocial ImpactThe huge number of bankruptcies has had a strong negative effect on the economy, especially where creditors do not get paid. Nothing has changed as of this date, but there is a new bill called S.420 (Senate version-passed 3/15/01)/ HR 333 (House version). This bill would limit a consumer's bankruptcy rights severely. Some of the changes proposed are:A "needs-based" bankruptcy in chapter 7's....
