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

Summarized by Mark Bossi , Thompson Coburn LLP
15 years 4 months ago

Citation:

(8th Circuit, Dec 31,1969)

Tag(s):

8th Circuit

Ruling:

The 8th Circuit BAP rules that the Debtor failed to establish the dischargeability of her student loans based on undue hardship where her long-time, live-in boyfriend pays more than half of her living expenses and she is voluntarily underemployed.

Procedural context:

Appeal from an order of the Bankruptcy Court for the District of Minnesota holding that the Debtor's student loans should not be discharged pursuant to 11 U.S.C. Sec. 523(a)(8).

Facts:

The Debtor seeks to discharge approximately $47,000 in student loans on the grounds that they would impose an "undue hardship" under 11 U.S.C. Sec. 523(a)(8). The BAP affirms the Bankruptcy Court's conclusion that the Debtor failed to meet her burden of proving undue hardship where (i) the Debtor's long-time, live-in boyfriend pays more than half of the couple's household expenses, (ii) the Debtor's job history indicates that she is voluntarily underemployed, and (iii) the Debtor is eligible for an income contingent repayment plan under which she will be able to maintain a minimal standard of living.

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