Trudel v. U.S. Department of Education (In re Trudel)

Summarized by Thomas DeCarlo , John Steinberger & Associates, PC
11 years 6 months ago

Citation:

Case No. 13-8049 (6th Cir. BAP 2014)

Tag(s):

Ruling:

Student loans were not dischargeable where debtor proved that current income was not sufficient to pay loans and maintain minimal standard of living, but debtor did not present any evidence that current conditions were likely to continue for substantial duration of repayment period and debtor lacked good faith by failing to make any payments and failing to accept income contingent repayment plan because debtor was concerned about impact on debtor's credit rating.

Procedural context:

Debtor, acting pro se, brought action in the Bankruptcy Court in the Northern District of Ohio seeking to discharge student loans. Bankrptcy Court held that loans were not discharged. On appeal, the Sixth Circuit BAP affirmed.

Facts:

Debtor, a 55 year old single woman, sought to discharge over $129,000 in student loans. Debtor demonstrated inability to make payments while maintaining a minimal standard of living where debtor's gross income was less than $20,000 per year and debtor had serious and chronic medical conditions. However, debtor did not present any evidence that medical conditions prevented debtor from working or that medical conditions would continue to impede debtor's ability to work in the future. Debtor's employment presented ability to advance and increase income which would increase debtor's ability to pay. Debtor also lacked good faith where debtor had been offered repayment plan with minimal payments but debtor declined because she was concerned about her ability to borrow money in the future, indicating that debtor was less concerned about making an effort to repay loans. Debtor had not made a voluntary payment since graduation almost 20 years before and the only payments received were intercepts of debtor's federal tax refunds.

Judge(s):

Humphrey, Lloyd and Preston

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