Adam Harrison Bryant - Adversary Proceeding

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(US. Bankruptey Judge

UNITED STATES BANKRUPTCY COURT

DISTRICT OF COLUMBIA

In re: Case No. 19-00292-ELG

Adam Harrison Bryant, Chapter 7

Debtor.

Adam Harrison Bryant,

Plaintiff

V. Adv. Pro. No. 19-10012-ELG

Educational Credit Management Corp.,

Defendant.

ORDER GRANTING ECMC’S MOTION FOR SUMMARY JUDGMENT

The issue before the Court is whether the educational loan of the Debtor Adam Harrison

Bryant owed to Educational Credit Management Corporation (““ECMC”) is dischargeable under

the exception to nondischargeability of student loans in 11 U.S.C. § 523(a)(8) as posing an undue

hardship on the Debtor. The Debtor and ECMC filed and briefed cross motions for summary

judgment, in which each party raised substantially identical arguments. The Court heard

consolidated arguments thereon, and in order to provide the Debtor the most favorable inferences

of the law and the facts, ruled on ECMC’s motion. At the hearing held June 29, 2021, and upon

consideration of the evidence and argument on the cross motions in the light most favorable to the

Page 1 of 19

Debtor, the Court orally granted summary judgment in favor of ECMC. This order memorializes

the oral findings and rulings of the Court at that hearing.

Background

i. Procedural Background.

On May 1, 2019, the Debtor, with counsel, filed a petition for relief under Chapter 7 and

also pro se, a complaint to determine, inter alia, the dischargeability of his student loan debt

serviced by Nelnet Loan Services as of the filing (the “Complaint”).1 See Compl., ECF No. 1.

However, under the Family Education Loan Program (“FFELP”), lenders are prohibited from

holding interests in student loans that are the subject of an adversary proceeding in bankruptcy.

Mot. to Intervene, ECF No. 9, ¶ 4. Consequently, on May 23, 2019, the Debtor’s student loan was

assigned to ECMC. Id. Accordingly, on June 18, 2019, ECMC filed a Motion to Intervene in the

Debtor’s adversary proceeding as the party defendant because it held all right, title, and interest in

the FFELP loan at issue. Id. ECMC’s Motion to Intervene was granted on June 20, 2019 and

ECMC became the named defendant in this adversary proceeding. Order Granting Mot. Intervene,

ECF No. 27.

After the conclusion of discovery, the parties filed a joint pretrial statement including each

party’s list of exhibits and witnesses. See Joint Pre-Trial Statement, ECF No. 30. Trial on the

Complaint was scheduled to begin on February 24, 2020; however, the trial was continued so that

1 On May 1, 2019, commensurate with the instant Complaint, the Debtor also filed a complaint against AccessLex,

Institute, d/b/a Access Group, Adv. Pro. No. 19-10011 seeking substantially similar relief. The Debtor filed a Motion

for Default Judgment, Adv. Pro. No. 19-10011 (Aug. 9, 2019), ECF No. 20, which motion was stayed pending

resolution of this case. The Court will, by separate notice, set that matter for hearing on the default judgment request.

the Debtor could obtain pro bono counsel.2 Following the continuance, delays associated with the

appointment of counsel and the onset of the COVID-19 pandemic prevented the scheduling of any

further hearings on the matter indefinitely.3 The case resumed in October 2020 with the

appointment of pro bono counsel for the Debtor.4 Order Appointing Counsel, ECF No. 44. On

March 2, 2021, over a year after the original trial date, the Debtor filed his Motion for Summary

Judgment. ECMC responded by filing a Motion to Strike the Debtor’s Motion for Summary

Judgment, arguing that it was not timely filed. Mot. Strike Debtor’s Mot. Dismiss, ECF No. 54.

Due to the unique facts and circumstances of this case, including the intervening COVID-19

pandemic, the Court denied the Motion to Strike, and extended the time for ECMC to file its own

Motion for Summary Judgment. See Am. Sched. Order, ECF No. 63; Order Den. Def.’s Mot.

Strike, ECF No. 64. ECMC filed its Motion for Summary Judgment on June 4, 2021 (collectively

with Debtor’s Motion for Summary Judgment, the “Motions”) and the parties fully briefed the

cross motions. Arguments on the Motions were heard at a consolidated hearing on June 29, 2021.

2 Under the Court’s Local Bankruptcy Rule 2090-4(b)(4), pro se parties in adversary proceedings may file applications

for appointment of pro bono counsel. The Debtor filed his application on July 3, 2019. See Appl. Counsel, ECF No.

19.

3 United States District Court for the District of Columbia, Standing Order No. 20-8, In re Restrictions on Courthouse

Visitors (Mar. 13, 2020).

4 Pro bono counsel was originally appointed on February 18, 2020, but the appointed attorney ultimately declined the

appointment. See Order Appointing Counsel, ECF No. 35.

ii. Factual Background.5

Prior to filing bankruptcy, the Debtor accrued student loan debt under the FFELP for higher

education costs, including law school. The Parties agree that ECMC is the present holder of the

Debtor’s consolidated FFELP student loan. As of May 23, 2019, the outstanding principal balance

of the loan was $76,649.65, rising to $80,694.33 as of June 2, 2021. At all times during the

pendency of this adversary proceeding, the Debtor was in his early 40s, had no dependents, and

had no documented illnesses or disabilities, either mental or physical, which impaired his daily

life, or affected his ability to work.

After completing his legal education, the Debtor obtained a license to practice law in the

Commonwealth of Virginia, was employed as a senior associate at KPMG, LLP, and was making

timely payments on his FFELP loan. In July 2008, the Debtor pled guilty to criminal charges in

the United States District Court for the District of Columbia, was sentenced to a period of

incarceration, and, due to the nature of the offense, his license to practice law was revoked. Joint

Pretrial Statement at ¶ 12, ECF No. 30. During the Debtor’s incarceration, he promptly arranged

with the loan servicer for the FFELP debt to be placed into abatement status. Id. at ¶¶ 14-15. After

release from incarceration, the Debtor again promptly updated the debt servicer about his situation,

change in income, and entered into a repayment agreement with monthly payments lower than the

pre-incarceration amount. Id. at ¶ 16. The Debtor began making timely payments at this lower rate.

Id. at ¶ 17. In July 2018, the Debtor applied for and was accepted into an income-driven repayment

plan wherein his monthly payment was $0. Debtor’s Dep. Oct. 24, 2019, Ex. 3 at 107:19—108:20,

5 In addition to the Statement of Stipulated Facts in the Joint Pretrial Statement (ECF No. 30), the Parties later set

forth further undisputed facts which both parties reference in their filings and/or sworn statements (ECF Nos. 48, 66,

68, and 73). The Court incorporates the Stipulated and undisputed facts into this decision.

ECF No. 66. The Debtor has remained in this repayment plan during the pendency of this case and

has not failed to make any voluntary loan payments during that same period of time.

Due to the nature of the Debtor’s criminal conviction, he was required to register as an

offender in the District of Columbia, beginning at the time of his release on February 12, 2011 for

a period of ten (10) years through February 18, 2021.6 Shortly after his release, the Debtor began

living in College Park, Maryland, and rented an apartment for $700.00/month. Id. at ¶ 21. In

September 2014, a change in policy of United States Probation Office for D.C. required the Debtor

to relocate into D.C. resulting in a substantial increase in his costs of living. Id. at ¶¶ 23-24. The

Debtor resided in D.C. until May 15, 2021, with the rent of his last apartment being

$1,691.75/month. Def.’s Mot. Summ. J., Ex. 20, ECF No. 66.

After satisfying the terms of his supervised release, in early 2021 the Debtor chose to

relocate to San Diego, California. Def.’s Mot. Summ. J., Ex. 6, ECF No. 66. The Debtor’s rent in

California is $2,025.00/month, including a $50.00/month pet fee incurred after purchasing a

Labrador retriever in early 2021 for $1,900.00. Def.’s Mot. Summ. J., Ex. 9, ECF No. 66. In

addition to the purchase, the Debtor paid the breeder an additional $2,080.00 to board the dog until

he could take possession of it in May 2021. Id.

However, the Debtor’s voluntary increases in expenses did not start upon his move to

California. In June 2020, approximately 7 months before the end of his supervised release, the

Debtor purchased a 2019 Ford Mustang. As part of the purchase, the Debtor made a $5,000.00

down payment, and financed the balance through a 72-month automobile loan from Capital One

6 D.C. Code § 22-4002 (2011).

Bank in the amount of $26,835.31, with monthly payments of $467.82. Def.’s Mot. Summ. J., Ex.

18, ECF No. 66. After purchasing the Mustang, the Debtor not only timely made his scheduled

monthly payments on the automobile loan, but also paid $14,756.15 in extra principal payments

in the 11-month period between the time of purchase and May 2021. Id.

Some of the Debtor’s cost of living increases over time are reflective of his improved

income during the same period. After his release, the Debtor found hourly employment as a valet

eventually being promoted to a managerial position within the company. Due to his criminal

record, the Debtor was hired in an independent contractor capacity “in case a client were to

discover [his] criminal record.” Debtor’s Mot. Summ. J., Ex. A at ¶ 25-26, ECF No. 48. The Debtor

had previously worked full-time for the D.C. government (Debtor’s Mot. Summ. J., Ex. A at ¶ 29,

ECF No. 48), however after six months in this position, the Debtor’s criminal history resulted in

his termination from the post. Id. at ¶ 30. The Debtor was unable to immediately secure a full-time

position following his termination and relied on his independent contractor work and family

support for income. Id. at ¶¶ 31-32.

When the Debtor filed his chapter 7 case he was working as an independent contractor

commissioned sales representative in the software industry, Compl. at ¶ 30, ECF No. 1, and his

own small business, Strategic Business Resources, LLC, which had contracts with two separate

entities, Debtor’s Reply in Supp. Mot. Summ. J. at 3, ECF No. 73. One of the LLC’s contracts

ended and was not renewed in February 2021, with the other still generating around $1,500 per

month as of the date of the summary judgment hearing. Id. In August 2020, the Debtor began full-

time employment with the United States Small Business Administration (SBA) as a Loan

Specialist. Debtor’s Opp. Def.’s Mot. Summ. J., Ex. B at 14, ECF No. 72. Through all of his

various forms of income, in 2020, the Debtor had a total income of at least $101,051.76, and a

total net income of at least $21,561.36. Debtor’s Mot. Summ. J. at ¶ 35, ECF No. 48.

Discussion

i. Summary Judgment Standard.

“A party may move for summary judgement, identifying each claim or defense on which

summary judgment is sought.” Fed R. Civ. P. 56(a). Summary judgment is appropriate only if the

Debtor can show “that there is no genuine dispute as to any material fact and [are] entitled to

judgment as a matter of law.” Id. A genuine dispute exists where “the evidence is such that a

reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 248 (1986). A motion for summary judgment must be read “in the light most

favorable to the nonmoving party and the court must draw all reasonable inferences in favor of the

nonmoving party.” Talavera v. Shah, 638 F.3d 303, 308 (D.C. Cir. 2011). “If the evidence is such

that a reasonably jury could return a verdict for the nonmoving party . . . the summary judgment

motion must be denied.” Johnson v. Perez, 823 F.3d 701, 705 (D.C. Cir. 2016) (citing Anderson,

477 U.S. at 248); see also Brown v. PSI Servs., Inc., 736 F. Supp. 2d 234, 236 (D.D.C. 2010) (“the

nonmoving party cannot rely on mere speculation or compilation of inferences to defeat a motion

for summary judgment.”).

The Court evaluates cross motions for summary judgment under the same general

standards for summary judgment. Butler v. Wash. Metro. Area Transit Auth., 275 F. Supp. 3d 70,

82 (D.D.C. 2017). To provide the Debtor with the most favorable evaluation of and inferences

from the facts and law, the Court first considers the motion for summary judgment filed by the

ECMC. Because the Court grants the ECMC’s Motion, the Debtor’s motion is moot.

ii. Dischargeability of Education Debt.

The integral issue to the resolution of this case is whether the Debtor may discharge his

FFELP student loan debt as an undue hardship pursuant to § 523(a)(8)7 of Title 11 of the United

States Code, 11 U.S.C. §§ 101-1532 (as hereafter amended, the “Bankruptcy Code”). While the

bankruptcy discharge is the cornerstone of bankruptcy law, a debtor’s entitlement to discharge is

not absolute, as evidenced in § 523(a). Specifically, with respect to educational loan debts, §

523(a)(8) provides:

A discharge under section 727 . . . of this title does not discharge an individual

debtor from any debt—unless excepting such debt from discharge under this

paragraph would impose an undue hardship on the debtor and the debtor’s

dependents, for—

(A)(i) an educational benefit overpayment or loan made, insured, or guaranteed by

a governmental unit, or made under any program funded in whole or in part by a

governmental unit or nonprofit institution; or

(ii) an obligation to repay funds received as an educational benefit, scholarship,

or stipend; or

(B) any other educational loan that is a qualified education loan . . . incurred by a

debtor who is an individual.

11 U.S.C. § 523(a)(8). This exception to the nondischargeability of educational debt creates a

presumption that education-related debts are not dischargeable unless there is a clear showing of

“undue hardship.” United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 281 n.13 (2010)

(“[Section] 523(a)(8) renders student loan debt presumptively non-dischargeable ‘unless’ a

determination of undue hardship is made.”). It is uncontested that the Debtor’s FFELP was an

7 Citations to sections herein shall be to 11 U.S.C. unless otherwise indicated.

“educational loan” as that term is used in § 523(a)(8), and therefore the only question before the

Court was whether excluding the loan from the Debtor’s discharge would be an undue hardship.

iii. Undue Hardship.

As both the Debtor and ECMC noted in their briefs and oral argument, there is no

controlling authority in this Circuit as to the standard of what constitutes “undue hardship” in the

context of § 523(a)(8). However, the Court recognizes and is informed by the two primary

standards that have evolved over time in other Circuits. In Brunner v. New York State Higher

Educational Services Corp., the Second Circuit developed a three-prong test, now commonly

referred to as the “Brunner test.” 831 F.2d 395 (2d Cir. 1987). The Third, Fourth, Fifth, Sixth,

Seventh, and Ninth Circuits have since adopted the Brunner test or a substantially similar test.8 In

contrast, the Eighth Circuit adopted a “totality of the circumstances” test, which also involves a

separate, but similar three factor analysis. See Andrews v. South Dakota Student Loan Assistance

Corp. (In re Andrews), 661 F.2d 702, 704 (8th Cir. 1981). The District of Columbia Circuit has

not adopted either standard, and this Court has likewise previously declined to formally adopt

either the Brunner test or the totality of the circumstances test. See Zook v. Edfinancial Corp. (In

re Zook), No. 05-00083, 2009 Bankr. LEXIS 788 (Bankr. D.D.C. Feb. 27, 2009). Because the

result under either standard would be the same on the facts and circumstances of this case, the

Court does not need to reach the issue of the “appropriate” test to determine whether not

8 See Pa. Higher Educ. Assistance Agency v. Faish (In re Faish), 72 F.3d 298, 306 (3d Cir. 1995); Educ. Credit Mgmt.

Corp. v. Frushour (In re Frushour), 433 F.3d 393, 400 (4th Cir. 2005); U.S. Dep’t of Educ. v. Gerhardt (In re

Gerhardt), 348 F.3d 89, 91 (5th Cir. 2003); Oyler v. Educ. Credit Mgmt. Corp. (In re Oyler), 397 F.3d 382, 385 (6th

Cir. 2005); In re Roberson, 999 F.2d 1132, 1135 (7th Cir. 1993); Educ. Credit Mgmt. Corp. v. Mason (In re Mason),

464 F.3d 878, 881–82 (9th Cir. 2006).

discharging the Debtor’s FFELP loan would be an undue hardship. However, it is instructive to

review each standard and its application to the facts herein.

a. The Brunner Test.

The three parts of the test established by Brunner are:

(1) that the debtor cannot maintain, based on current income and expenses, a

“minimal” standard of living for herself and her dependents if forced to repay the

loans;

(2) that additional circumstances exist indicating that this state of affairs is likely to

persist for a significant portion of the repayment period of the student loans; and

(3) that the debtor has made good faith efforts to repay the loans.

Brunner, 831 F.2d at 396. The Brunner test is a conjunctive test, each part must be proven by a

preponderance of the evidence and a debtor must meet each element to be entitled to the discharge

of the educational debt in question. See Educ. Credit Mgmt. Corp. v. Frushour, 433 F.3d 393, 400

(4th Cir. 2005).

The first Brunner element requires the Court conduct a factual analysis of current financial

means of a debtor and their standard of living, and to determine if the debtor is both maximizing

income and minimizing expenses to a reasonable level. See Brunner, 831 F.2d at 396. While this

prong does “not require [a debtor to] live in abject poverty,” In Re Faish, 72 F.3d at 305, “a

minimal standard of living under § 523(a)(8) does not equate to a middle class standard of living.”

Educ. Credit Mgmt. Corp. v. Howe (In re Howe), 319 B.R. 886, 889 (B.A.P. 9th Cir. 2005). The

second Brunner element requires the Court to prospectively evaluate the circumstances

surrounding a debtor’s state of affairs and determine if any present hardships indicate a persistent

bar to loan repayment likely to continue. Oyler v. Educ. Credit Mgmt. Corp. (In re Oyler), 397

F.3d 382, 386 (6th Cir. 2005). The final Brunner prong requires the Court to determine whether

the Debtor has attempted to repay the loan in good faith. Brunner, 831 F.2d at 396. This includes

considering “whether the debtor has tried to make some payments when he or she could or has

sought to defer the loan or renegotiate the repayment plan.” In re Zook, 2009 Bankr. LEXIS 788

at *31. Additionally, “the good faith portion of the Brunner test should consider whether the debtor

is acting in good faith in seeking the discharge, or whether he is intentionally creating his

hardship.” Educ. Credit Mgmt. Corp. v. Polleys, 356 F.3d 1302, 1309 (10th Cir. 2004).

b. Totality of the Circumstances Test.

In contrast, the “totality of the circumstances” test is comprised of three non-conjunctive

factors that courts should weigh in their analysis of undue hardship:

(1) the debtor’s past, present, and reasonably reliable future financial resources;

(2) a calculation of the debtor’s and [their] dependent’s reasonable necessary living

expenses; and

(3) any other relevant facts and circumstances surrounding each particular

bankruptcy case.”

Long v. Educ. Credit Mgmt. Corp. (In re Long), 322 F.3d 549, 554 (8th Cir. 2003). While these

factors are facially different from the Brunner prongs, the totality of the circumstances test utilizes

essentially the same general analysis. Stated otherwise:

[D]istilled to its essence, the finding of undue hardship under § 523(a)(8) following

the totality of the circumstances test rests on one basic question: ‘Can the debtor

now, and in the foreseeable near future, maintain a reasonable, minimal standard of

living for the debtor and the debtor’s dependents and still afford to make payments

on the debtor’s student loans?’

Bronsdon v. Educ. Credit Mgmt. Corp. (In re Bronsdon), 435 B.R. 791, 800 (B.A.P. 1st Cir. 2010).

iv. The Debtor’s Education Debt is Nondischargeable Under Both the Brunner Test

and the Totality of the Circumstances Test.

a. Brunner Element 1 – Minimal Standard of Living.

The Debtor, despite his good health, education, and recent financial success, urges the

Court to find that he is entitled to the discharge of his student loan debt under § 523(a)(8) as an

undue hardship. The Debtor’s argument is primarily based on his conclusory assertion that his

status as offender who was (and potentially still is in some jurisdictions) subject to registration

requirements renders him incapable of maintaining reliable full-time employment, particularly in

his chosen profession. In making this argument, however, the Debtor ignores the extensive record

indicating that not only is he more than able to provide for his obligations, he has, to his credit,

managed to prosper financially, particularly since the filing of his chapter 7 case and this adversary

proceeding. Under either test, in order to find that an educational debt is an undue hardship, the

Court must find that a debtor in the foreseeable near future would not be able to maintain a

reasonable, minimal standard of living. See In re Brondson, 435 B.R. at 801. While it is true that

when the adversary proceeding was originally filed the Debtor had encountered a period of income

instability, the evidence since the filing and through the date of the hearing clearly establishes that

the Debtor currently, and for the foreseeable future, has and will be able to maintain much more

than a minimal standard of living.

It is undisputed by both parties that the Debtor’s annual income for the year of 2020

exceeded $101,000, although the parties disagree as to the exact number. Debtor’s Mot. Summ. J.,

Ex. C, ECF No. 48. As of the hearing, the Debtor was currently employed by the SBA as a Loan

Specialist at the pay scale of GS-11 and was compensated at a rate of $72,750 per year. ECMC’s

Mot. Summ. J., Ex. 7, ECF No. 66. Conversely, the federal poverty guideline for a household of

one in 2021 is $12,880,9 making the Debtor’s 2020 income level, at a minimum, almost eight times

greater than the federal poverty level as of the date of the hearing. Even discounting any additional

income from his LLC or any sources other than the SBA, the Debtor’s current yearly salary is over

five times greater than the federal poverty level income for a family of one.

There is no categorical standard for what income in relation to the federal poverty level is

required to show difficulty in maintaining a minimal standard of living. However, debtors with

incomes of three and four times the poverty level have been routinely found to not satisfy the first

prong of the Brunner test. See, e.g., Hull v. U.S. Dep’t of Educ., No. 18-32076, 2021 Bankr. LEXIS

1097 (Bankr. W.D. Ky. Apr. 23, 2021) (finding that a debtor with an income greater than three

times the federal poverty guideline for a two-person household failed to satisfy the first prong of

the Brunner test); Lewis v. Mass. Higher Educ. Assistance Corp., No. 17-51357-KMS, 2020

Bankr. LEXIS 282 (Bankr. S.D. Miss. Jan. 29, 2020) (a debtor with an income greater than four

times the federal poverty guideline failed to satisfy the first prong of the Brunner test).

Additionally, when the Court considers that the Debtor’s own records indicate a net income of

over $20,00010 after deducting expenses, and the Debtor’s standard of living increase with his May

2021 voluntary relocation to California, even the most charitable view of the facts does not support

the Debtor’s argument that he cannot maintain a minimal standard of living. Debtor’s Mot. Summ.

J. at ¶ 35, ECF No. 48. Therefore, the Debtor fails the first prong of the Brunner test.

9. Assistant Sec’y for Plan. & Evaluation, 2021 Poverty Guidelines, HHS, Jan. 26, 2021, https://aspehhs.gov/2021-

poverty-guidelines.

10. In addition to the $20,000, the Debtor also has at his disposal the income of his solely owned LLC.

b. Brunner Element 2 – Situation will Persist for a Significant Time.

The Debtor argued that his status as an offender precluded (and may continue to preclude)

him from attaining and maintaining steady full-time employment in his preferred profession(s).

While the Debtor clearly faced challenges in the past related to securing employment within his

preferred profession(s), the evidence does not support a finding of current or future financial

instability. As of the date of the hearing, the Debtor had maintained full-time employment with

the SBA for almost a year. Even though the Debtor’s employment in this position was listed as a

“temporary appointment” and could possibly cease if the SBA deems the role no longer necessary,

the SBA has multiple loan programs for disaster assistance, including a COVID-19 Economic

Injury Disaster Loan with an extended the application deadline through December 31, 2021.11

Further, the Brunner test does not require evidence of guaranteed and/or continued employment,

but rather the opposite – whether present hardships present a persistent bar to current and future

employment and repayment. Even when considered in the light most favorable to the Debtor, there

is no evidence to indicate the Debtor’s position will be terminated in the near future, nor that even

if it were, the Debtor would be unable to find other employment. Indeed, the Debtor himself notes

that the renewal period of his employment began on a 30-day interval but has since been changed

to a 60-day interval. Given the Debtor’s extended employment with the SBA and termination of

his D.C. offender registration requirements, the Court finds that there is not a persistent bar to

repayment under the second Brunner prong.

11 SBA Reaches $200 Billion Milestone in Economic Injury Disaster Loan Program to Small Businesses and Non-

Profits, SBA, Feb. 12, 2021, https://www.sba.gov/article/2021/feb/12/sba-reaches-200-billion-milestone-economic-

injury-disaster-loan-program-small-businesses-non-profits.

The Debtor’s heavy reliance on Zook v. Edfinancial Corp. further undermines his position

and, in fact, demonstrates his inability to meet the second prong of the Brunner test. Zook, 2009

Bankr. LEXIS 788 at *27-31. In Zook, the debtor suffered from severe depression and bipolar

disorder, both of which are persistent, incurable, and debilitating mental health disorders

profoundly impacting an individual’s daily life. Id. at *6–*8. The Debtor here has indicated no

comparable issues with his health, either mental or physical, which prevent him from maintaining

a job, relying only on his conviction, related status, and registration requirements. The Debtor’s

own history shows he was able to secure and maintain multiple jobs post-conviction.

The Debtor instead argues that his status as an offender is a permanent hinderance to his

ability to obtain stable full-time employment, especially in his chosen profession. Offender

registration requirements are fundamentally different than persistent, ongoing mental or physical

illness. Further, documentation from the District of Columbia indicates that the Debtor is no longer

required to register in this jurisdiction, as he has satisfied the ten (10) year registration period

required by the law of the District. Def.’s Mot. Summ. J., Ex. 4, ECF No. 67. Additionally, prior

to moving, the Debtor determined that the registration period in Maryland is 15 years,12 and that

under a new law in California, he has the possibility to unregister, and until that time, he should

not be listed on the public notification website. Debtor’s Dep. Oct. 24, 2019, Ex. 3 at 116:15–16,

12 The website of the Maryland Department of Public Safety and Correctional Services (DPSCS) provides information

on registration period requirements; Tier I offenders are required to register for 15 years. Sex Offender Registry FAQs,

M.D. DPSCS, https://www.dpscs.state.md.us/onlineservs/sor/frequently_asked_questions.shtml (last visited Sept. 14,

2021).

ECF No. 66; Debtor’s Dep. May 21, 2021, Ex. 5 at 26:9–28:19, ECF No. 68.13 In short, in this

case, the Debtor’s conduct and the passage of time has actually mitigated the most limiting aspects

of his conviction. Accordingly, it does not rise to the level of persistence for a significant period

of time as required by Brunner.14 Thus, the Debtor does not satisfy the second prong of the Brunner

test.

c. Brunner Element 3 – Debtor’s Good Faith Efforts to Repay.

The final element under Brunner is whether the Debtor is seeking a discharge of his student

loan in good faith. ECMC does not argue that the Debtor’s Chapter 7 was not filed in good faith,

and instead argues that the Debtor’s reliance on his prior criminal conviction in support of

discharge of the loan is not in good faith. A split exists amongst bankruptcy courts as to whether

a debtor’s conviction precludes a finding of good faith in an undue hardship analysis. Compare

Chenault v. Great Lakes Higher Educ. Corp. (In re Chenault), 586 B.R. 414, 421 (6th Cir. BAP

2018) (finding a debtor’s criminal conviction prohibits a good faith determination under Brunner

because his incarceration was a condition “of his own making”), with Harvey v. Educ. Credit

Mgmt. Corp., 2013 Bankr. LEXIS 3379 at *12 (Bankr. Colo. Aug. 20, 2013) (holding that a

debtor’s criminal convictions did not preclude a finding of good faith). The Court does not have

to reach the issue of the impact of whether the Debtor’s criminal conviction necessarily precludes

13 As of January 1, 2021, California has a adopted a three-tier system for offender registration, with Tier I offenders

being required to register for a minimum of ten years. See Cal. Penal Code § 290(d)(1). Additionally, the Court

conducted a brief search on California’s offender website and Debtor’s name did not appear.

14 The Bankruptcy Court for the Northern District of Illinois’s holding in Promisco v. United States Dept. of Education

(In re Promisco), is also instructive. 625 B.R. 715 (Bankr. N.D. Ill. 2021). The Debtor in Promisco obtained two

successive full-time jobs, notwithstanding his prior felony convictions, demonstrated his employability, and therefore

the Court found he failed to show the criminal convictions were an exceptional circumstance that would render him

unable to pay for the entire period of his student loans. Id. at 729. In the instant case, this Court can only conclude this

Debtor currently does and will in the future have the ability to continue paying on the debt.

a finding of good faith and specifically declines to adopt either approach. There are more than

sufficient other facts in this case that convince the Court the Debtor fails to satisfy this prong.15

First, in June 2020, the Debtor purchased a 2019 Ford Mustang with a $5,000.00 down

payment and financed the remaining $26,835.31. While the Debtor has the freedom to choose

which type of vehicle he purchases, a Mustang is not the most economical of vehicles, either in

initial price, costs of use, repair, maintenance, or insurance. The Debtor did not provide any

evidence or argument to justify or explain the purchase of a high-end vehicle instead of a more

economical vehicle.

Further, since the purchase of the vehicle, the Debtor has timely made his monthly vehicle

loan payments of $467.82. Moreover, instead of merely making his minimum monthly car

payments, the Debtor chose to aggressively pay down the vehicle loan by making $14,756.15 in

extra principal payments between July 2020 and May 2021. Debtor’s Dep. May 21, 2021, Ex. 5 at

44:17–45:17, ECF No. 68. The Court finds the Debtor’s explanation for such aggressive payments

– to pay off the car in order to have a place to live if he could not pay rent for an apartment –

unpersuasive to overcome the implied lack of good faith with respect to his FFELP loan. Based on

a basic 30-year repayment plan which ECMC offers, the Debtor’s monthly loan payment would

be approximately $325.00. At that rate, the $14,756.15 in excess principal payments on the vehicle

would have covered over 45 months of payments, or almost four years, on his loan to ECMC.

15 Furthermore, reliance solely on a criminal conviction is inconsistent with the “paramount objective of the corrections

system,” namely the “rehabilitation” of “offenders [who] will eventually return to society.” Pell v. Procunier, 417

U.S. 817, 823 (1974).

Def.’s Mot. Summ. J. at ¶ 47, ECF No. 66.16 Instead, the Debtor made no payments to ECMC over

the same period.

In addition to purchasing the Mustang, in early 2021 the Debtor purchased a purebred

Labrador retriever from a specialty breeder at a price of $1,900, then spent an additional $2,080 to

board the dog pending his move to California, and purchased a $1,802 necklace for a “friend.”

Debtor’s Dep. May 21, 2021, Ex. 5 at 58:6–59:14, 64:3–65:12, ECF No. 68. During that same

period, the Debtor did not make any payments to ECMC. While the Court sympathizes with the

desire for animal companionship, spending nearly $4,000 to purchase and board a purebred dog is

hardly indicative of an attempt to minimize expenses in good faith.17 The Debtor’s explanation

that he was looking for a “strong companion and loving animal” does not overcome the implied

lack of good faith in this situation, particularly when there are many loving companions awaiting

adoption at local shelters for minimal adoption fees. Debtor’s Opp. Def.’s Mot. Summ. J., Ex. A

at ¶ 17, ECF No. 72.18 Finally, purchasing expensive gifts such as the necklace while not making

loan payments is counterintuitive to a finding of a that the Debtor is maintaining a minimal

standard of living and making a good faith effort to repay his student loan. The standard requires

that despite all efforts, a debtor still does not have any money remaining to pay towards their

student loans. That is clearly not the situation in this case. For all of these reasons, the Court finds

that the Debtor fails to satisfy the third prong of the Brunner test.

16 Alternatively, under a 25-year repayment plan, the monthly payment would be $384, and the excess principal

payments would have covered over 38 months, or over three years of payments.

17 Not to mention that ownership of the dog will not be limited to the purchase price, but will include ongoing

additional costs for food, grooming, veterinary care, and an additional $50 per month “pet fee” on his apartment lease.

18 The Court also questions how the Debtor would live out of his Ford Mustang with a fully grown Labrador retriever.

d. The Totality of the Circumstances Test.

Much of the analysis of the Brunner prongs is also relevant to the totality of the

circumstances elements. As discussed above, the record indicates that while the Debtor did

previously have issues obtaining long-term employment, he is now financially stable and able to

maintain a more than minimal, comfortable lifestyle. The Debtor’s income for the year 2020 was

greater than $101,000, and he has no dependents or exceptional non-luxury financial obligations.

Debtor’s Mot. Summ. J., Ex. C, ECF No. 48. As for “any other relevant facts and circumstances,”

the only abnormal aspect of the Debtor’s petition is his criminal conviction. However, despite this

obstacle, the Debtor has been able to prosper financially, secure professional employment, and

engage in a greater than “minimal” level of lifestyle. The Debtor’s current standard of living clearly

negates any weight this factor would otherwise afford. Thus, the Debtor has not sufficiently proven

that he meets the requirements of showing “undue hardship” and his student loan debts cannot be

rendered dischargeable.

Conclusion

Under either the Brunner or the totality of the circumstances test, the facts clearly establish

that the Debtor now, and in the foreseeable near future, has the ability to maintain a reasonable,

minimal standard of living, and that making payments on the FFELP student loan will not be an

undue hardship. Based upon the foregoing, the Court finds that the Debtor does not meet the

requirements under § 523(a)(8) and his debt is nondischargeable. Thus, the Court grants ECMC’s

Motion for Summary Judgment, and denies the Debtor’s Motion for Summary Judgment as moot.

[Signed and dated above]

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