Educational Credit Management Corp. v. Jorgensen (In re Jorgensen)

Summarized by Eryk Escobar , Department of Justice
13 years 5 months ago

Citation:

2012 Bankr. LEXIS 4303

Tag(s):

Ruling:

The Ninth Circuit Bankruptcy Appellate Panel ("BAP"), affirmed the Bankruptcy Court ("Court") for the District of Hawaii. Specifically, the BAP upheld the partial discharge of the debtor's student loans under § 523(a)(8) and the three prong Brunner test. Brunner v. N.Y. State Higher Educ. Servs. Corp. (In re Brunner), 46 B.R. 752 (Bankr. S.D.N.Y.). Although the BAP felt like the third prong - good faith - was a close, after considering all of the circumstances, the BAP affirmed the partial discharge.

Procedural context:

On appeal from the Bankruptcy Court for the District of Hawaii.

Facts:

Debtor Stacy Marie Jorgensen ("Jorgensen") sought to discharge student loan debt. Jorgensen obtained a bachelor of science degree, a master of science degree and a Ph.D. in geography. The student loan debt financed part of her graduate education. Jorgensen made timely payments on her student loans from January 2002 until she entered forbearance in June 2010. In early 2010, a blood test revealed that Jorgensen suffered from stage IIB pancreatic adencarcinoma. After undergoing chemotherapy, radiation and then surgery, reports show that she is doing quite well. Still, Jorgensen receives quarterly checkups to look for cancer recurrence. Jorgensen now suffers from other ailments that affect her ability to work: 1) pancreatic enzyme insufficiency; 2) high blood pressure; and 3) anemia.

Judge(s):

Jury, Hollowell and Pappas Bankruptcy Judges

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