Poynter v. U.S.

Summarized by Eryk Escobar , Department of Justice
13 years 11 months ago

Citation:

2012 U.S. App. Lexis 6168, Case No. 10-56751 (9th Cir. 2012)

Tag(s):

Ruling:

The District Court for the Southern District of California (the "District Court") correctly ruled that the educational loans held by the Department of Education were not dischargeable under 11 U.S.C. § 523(a)(8)(A) (1990).

Procedural context:

Appeal from the District Court denying discharge of educational loans under 1 U.S.C. § 523(a)(8)(A) (1990). Affirmed.

Facts:

Eric Poynter ("Debtor") filed for relief under chapter 7 of Title 11 of the United States Code. On March 1994, Debtor received a discharge. Subsequently, on September 2008, Debtor reopened his case for the purpose of obtaining a declaration declaring that two 1985 educational loans, held by the Department of Education, were subject to the March 1994 discharge injunction. Both the Bankruptcy Court and District Court held that the loans were not dischargeable under 11 U.S.C. § 523(a)(8)(A) (1990). The Ninth Circuit Court of Appeals ("Appeals Court") focused on whether the educational loans had become due more than 7 years before the filing of the bankruptcy petition. 11 U.S.C. § 523(a)(8)(A) (1990). Here, the critical date was October 27, 1986. Debtor argued that two provisions of the promissory notes caused the loans to become due by October 27, 1986. First, Debtor attempted to show that his grace period had run by September 1986 because he ceased to carry at least one-half the normal academic workload when he stopped attending most of his classes. The Appeals Court rejected that argument, ruling that enrollment, not attendance, was the question. Second, Debtor focused on a term in the note that stated that the loan would become "immediately due and payable" upon default. The event of default posited by Debtor was the failure to notify the lender of a change in enrollment status. The Appeals Court also rejected this argument finding that although such failure could constitute default, the lender has the discretion over when to declare a default, (i.e. when to demand repayment). Here, there was no evidence that the lender demanded repayment more than seven years before Debtor filed for bankruptcy, (i.e. more than seven years before October 27, 1986).

Judge(s):

Farris, Clifton and Ikuta, Circuit Judges.

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