POST BAPCPA:
In the
Matter of: Coleman, No. 06-16477
U.S. 9th Circuit Court of Appeals, August 01, 2008
"[U]ndue hardship" determinations, whereby bankruptcy courts
decide whether student loans qualify for discharge, can be
ripe in a Chapter 13 case substantially in advance of plan
completion. Since
graduating from college, Coleman has been irregularly
employed as a substitute teacher and art teacher, and was
recently laid off in March of 2005. Just under a year after
the plan was confirmed, Coleman sought a determination that
it would constitute an undue hardship under 11 U.S.C. §
523(a)(8) for her to repay her student loans, and that her
student loans should therefore not be excepted from
discharge. Educational Credit moved to dismiss for lack of
subject matter jurisdiction on ripeness grounds. The
bankruptcy court denied the motion, In re Coleman,
333 B.R. 841 (Bankr. N.D. Cal. 2005), and the district court
affirmed the decision of the bankruptcy court. We
affirm. Read
more...
Espinosa v. United Student Aid Funds, Inc.,
No. 06-16421
U.S. 9th Circuit Court of Appeals, June 24, 2008
In a case arising from bankruptcy proceedings in which
plaintiff-debtor obtained a discharge order, but was later
pursued by defendant-creditor for a student loan debt that
debtor argued had been discharged, the matter is remanded
for consideration of whether the bankruptcy court's
discharge order in the case was entered as a result of a
clerical error (the discharge order failed to comport with
the Confirmed Plan) and, if so, whether to correct it so as
to conform to debtor's Chapter 13 plan.
Read more...
WARNING: PRE- BAPCPA:
Educ. Credit Mgmt. Corp.
v. Mason (09/28/06 - No. 04-35999) (9th Cir.Ct.App)
Partial discharge of government-insured student loans is
reversed where the debtor had not made a good effort to pay
back the loans since he had not maximized his income or made
adequate efforts to obtain full-time employment.
Read opinion.
Educ. Credit Mgmt. Corp. v. Nys,
No. 04-16007 (9th Cir. April 26, 2006)
A bankruptcy panel's reversal of a ruling against a creditor
on her adversary complaint in bankruptcy court to have her
student loans discharged is affirmed where the bankruptcy
court erred in requiring the debtor to show exceptional
circumstances beyond the inability to pay in the present and
a likely inability to pay in the future. "Has the
Debtor shown that her inability to pay will likely persist
throughout a substantial portion of her loans' repayment
period?" [(1)] Serious mental or physical disability
of the debtor or the debtor’s dependents which prevents
employment or advancement; [(2)] The debtor’s obligations to
care for dependents; [(3)] Lack of, or severely limited
education; [(4)] Poor quality of education; [(5)] Lack of
usable or marketable job skills; [(6)] Underemployment;
[(7)] Maximized income potential in the chosen educational
field, and no other more lucrative job skills; [(8)] Limited
number of years remaining in [the debtor’s] work life to
allow payment of the loan; [(9)] Age or other factors that
prevent retraining or relocation as a means for payment of
the loan; [(10)] Lack of assets, whether or not exempt,
which could be used to pay the loan; [(11)] Potentially
increasing expenses that outweigh any potential appreciation
in the value of the debtor’s assets and/or likely increases
in the debtor’s income; [(12)] Lack of better financial
options elsewhere.
http://caselaw.lp.findlaw.com/data2/circs/9th/0416007p.pdf
Brunner
v. N.Y. State Higher Educ. Servs. Corp. (In re Brunner), 46 B.R. 752,
753- 55 (Bankr. S.D.N.Y. 1985), The district court had
thoroughly analyzed the limited legislative history
pertaining to the “undue hardship” requirement.
SAXMAN v. EDUC. CREDIT MGMT.
CORP., No. 01-35620 (9th Cir. April 14, 2003)
Bankruptcy courts may partially discharge an educational loan
pursuant to their equitable authority under 11 U.S.C. section
105(a).
http://caselaw.lp.findlaw.com/data2/circs/9th/0135620p.pdf
IN RE CHAMBERS (11/04/03 - No.
03-1557) (7th Cir) In a Chapter 7 declaratory judgment action,
summary judgment to plaintiff is affirmed where plaintiff's
unpaid balance on a student account does not meet the
definition of an educational loan under section 523(a)(8) and
was therefore properly discharged.
http://caselaw.lp.findlaw.com/data2/circs/7th/031557p.pdf
"Accordingly, applying this
standard, the bankruptcy court found no evidence of intent by
either party to enter into a loan arrangement; rather, the
debt arose from Ms. Chambers’ failure to pay the tuition and
expenses when due."
BACK TO BANKRUPTCY CASE LAW
Index
OPINION
SUMMARIES ARCHIVE FindLaw archives case law summaries of
opinion issued since September 2000 by the U.S. Supreme Court,
all thirteen Federal Circuit Courts, the California Supreme
Court, the California Appellate Courts, and the New York Court
of Appeals.
http://caselaw.lp.findlaw.com/casesummary/index.html
