In re Dewey, (Bkrtcy.W.D.Tenn.)

Discharge - Unemployed Chapter 7 debtor suffering from bipolar disorder was not entitled to undue hardship discharge of student loans.

An unemployed Chapter 7 debtor whose bipolar disorder allegedly prevented from working in his former occupation as psychiatrist, and whose monthly income, consisting entirely of contributions from relatives, was nearly $1,000 less than his scheduled monthly expenses, failed to satisfy even the first prong of the Brunner "undue hardship" test for the dischargeability of his student loan debt. There was a complete lack of evidence either that the debtor had minimized his expenses, given that he had continued to pay to maintain his psychiatric license despite his alleged inability to practice psychiatry, and that his bipolar disorder, from which the debtor had suffered since high school, and which had not prevented him from graduating from an Ivy league school, completing his medical studies or fulfilling his psychiatric residency, was such as to prevent him from obtaining any employment that would permit him to make payments on his student loans.

Educational Credit Management Group vs. Mason D-04-1075-BMaP 04-1077

Educational Credit Management Corporation (“ECMC”) appeals from the decision of the Bankruptcy Appellate Panel (“BAP”), which affirmed the bankruptcy court’s partial dis-
charge of government-insured student loans held by Debtor-Appellee Keith Mason (“Mason”). See Educ. Credit Mgmt. Corp. v. Mason (In re Mason), 315 B.R. 554 (B.A.P. 9th Cir. 2004). The bankruptcy court held that full repayment of the
loans would cause Mason an undue hardship within the meaning of 11 U.S.C. § 523(a)(8). It therefore discharged all amounts that Mason owed to ECMC in excess of $32,400.1
The bankruptcy court had jurisdiction under 28 U.S.C. § 157(b). The BAP had jurisdiction under § 158(c). We have jurisdiction under § 158(d), and we reverse.

Date of opinion: 9/28/06

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Educational Credit Management Group vs. Mason D-04-1075-BMaP

Keith Mason, an intelligent, determined chapter 7 (1) debtor, substantially overcame a learning disability and obtained a law degree, but finds that his disability impedes his admission to the bar, and adversely affects his access to the job market and professional employment.

He sought discharge of his student loans under § 523(a)(8). After trial, the bankruptcy court concluded that, although repayment of the full amount of the loan would impose an undue hardship on him, repayment of some lesser amount would not. Based on § 105(a) and In re Saxman, 325 F.3d 1168 (9th Cir. 2003), the bankruptcy court granted partial discharge. In re Mason, 303 B.R. 459 (Bankr. D. Idaho 2004). We AFFIRM.


Date of decision: 10/28/04

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In re Mason, Mason vs. Educational Credit Mgt. Group 03-6122

Discussion about the application of the Third Prong of the Brunner test after being directed by the Court of Appeals.

Date of the opinion: 9/9/2006

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In re Douglas Adversary Case No: 05-07021 and 05-07022

The discharge of student loans is reserved for those most extreme instances of financial destitution. It is the Court’s finding that this debtor finds herself in such a situation. The Court holds that Debtor has carried her burden of proving, under the standard set forth in In re Brunner and adopted by the Eleventh Circuit Court of Appeals in In re Cox, that excepting Debtor’s student loan debt from discharge would impose an undue hardship on Debtor and her dependent son. As such, the student loan debt at issue, representing loans made by ECMC and the DOE, is held to be dischargeable.

Date of decision: 3/14/07

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In re Wynn

Discharge - Court had to consider income of debtor's spouse in conducting student loan dischargeability analysis.

A Chapter 7 debtor could not satisfy the first, or "minimal standard of living," prong of the Brunner test, and was not entitled to an "undue hardship" discharge of his more than $103,000 in student loan debt. The combined net monthly income of debtor and his wife, in the amount of $6,000, exceeded their monthly expenses of $3,846.99 by more than $2,000. In assessing whether the debtor had ability, based on his current circumstances, to repay his student loan debt while still maintaining a minimal standard of living for himself and his dependents, as required by the first prong of Brunner, the court had to consider the income both of the debtor and his nondebtor-wife and had to compare their joint income to their total household expenses.