ORDER DENYING MOTION TO SET ASIDE ORDER TO ALLOW CLAIM AND OBJECTION TO CLAIM
THIS CAUSE is before the Court upon the debtor’s “Motion to Set Aside Order to Allow Claim and Objection to Claim” filed on May 25, 1994. The parties have submitted a stipulation of fact and have briefed the issue of whether the United States may claim interest accruing during a prior bankruptcy case which was dismissed.'
The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157(a), 1334. Moreover, this Court concludes that this is a “core proceeding” within the meaning of 28 U.S.C. § 157(b) as exemplified by 28 U.S.C. § 157(b)(2)(B).
The parties stipulate that the debtors previously filed a Chapter 13 petition in bankruptcy on August 8, 1988, but that case was dismissed on August 20, 1993, without a discharge being granted. On September 10, 1993, the debtors filed their second Chapter 13 petition, and objected to the proof of claim filed by the United States for federal income taxes. The proof of claim includes interest on unpaid federal income taxes which accrued during the first chapter 13 ease.
Section 349 of the Bankruptcy Code states the effect of a dismissal of a bankruptcy case, providing in part:
(b) Unless the court, for cause, orders otherwise, a dismissal of a case other than under section 742 of this title—
(1) reinstates—
(A) any proceeding or custodianship superseded under section 543 of this title;
(B) any transfer avoided under section 522, 544, 545, 547, 548, 549, or 724(a) of this title, or preserved under section 510(c)(2), 522(i)(2), or 551 of this title; and
(C) any lien voided under section 506(d) of this title;
(2) vacates any order, judgment, or transfer ordered, under section 522(f)(1), ” 542, 550, or 553 of this title; and
*911 (3) revests the property of the estate in the entity in which such property was vested immediately before the commencement of the case under this title.
11 U.S.C. § 349(b). This section negates, as it was intended to, the consequences of the filing of the petition in bankruptcy where the case is dismissed without discharge.
See generally In re Nash,
In the instant case, since the debtors did not receive a discharge in their prior chapter 13 petition, the dismissal of that case negated the prior effects of the petition, including the imposition of the automatic stay which precluded interest from accruing while the debtors were in bankruptcy. Had the debtors completed their case, the debts would have been discharged. However, since they did not complete the case and it was dismissed, they are in the same position
1
as if the bankruptcy had not been filed. Likewise, the creditor is placed in the same position as if the case had not been filed such that it is entitled to calculate the interest accruing during that period.
See In re Whitmore,
ORDERED that the debtor’s “Motion to Set Aside Order to Allow Claim and Objection to Claim” filed on May 25, 1994, is DENIED.
IT IS SO ORDERED.
Notes
. Of course, the debt is reduced by the amount debtors in fact paid during the Chapter 13 case.