The opinion
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
IN RE: §
§
BRADLEY STEVEN EPPERSON § Case No. 17-42001
xxx-xx-3599 §
§
Debtor § Chapter 7
§
BRADLEY STEVEN EPPERSON §
§
Plaintiff §
§
v. § Adversary No. 18-4015
§
EDUCATIONAL CREDIT §
MANAGEMENT CORPORATION §
§
Defendant §
§
§
FINDINGS OF FACT AND CONCLUSIONS OF LAW
Upon trial of the complaint filed by the Plaintiff, Bradley S. Epperson (“Plaintiff”),
in the above-referenced adversary proceeding, seeking a determination that the student
loan indebtedness currently due and owed to the Defendant, Education Credit
Management Corporation (“ECMC”), should be discharged because it imposes an undue
hardship upon the Plaintiff and his dependents, the Court issues the following findings of
fact and conclusions of law pursuant to Fed. R. Civ. P. 52, as incorporated into adversary
proceedings in bankruptcy cases by Fed. R. Bankr. P. 7052.
FINDINGS OF FACT1
1. The Plaintiff, Bradley S. Epperson, is a 54-year-old married man who resides with
his wife of twenty years in a five-person household in Allen, Texas.
2. Between the fall of 1987 and the summer of 1996, the Plaintiff utilized various
educational loans to finance certain tuition expenses, including payments made to
the DeVry Institute of Technology in Phoenix, Arizona, where he graduated with a
Bachelor of Science degree in Electronics Engineering Technology.
3. Prior to that time, the Plaintiff was awarded an Associate of Arts Degree in
Computer Technology from the ABC Technical and Trade School in 1988.
4. The student loans procured by the Plaintiff qualified him to obtain various
engineering positions over the course of a work career exceeding twenty years.2
5. Over the life of the loans, the Plaintiff has paid approximately $48,901 in service
of his student loan obligations.
6. On May 9, 1997, the Plaintiff consolidated his educational loans in the cumulative
amount of $47,059.54.3
7. Among other things, the consolidation paid the outstanding balances on the
Plaintiff’s various educational loans that had been tendered through both
subsidized and unsubsidized disbursements through the United States Department
of Education, as well as other non-governmental lenders, and consolidated them
into a single loan with a fixed interest rate.
8. The Defendant, ECMC, is the present owner and holder of the consolidated note
which it acquired by means of assignment on April 13, 2018 after the initiation of
this adversary proceeding by the Plaintiff.4
1 These findings of fact and conclusions of law are not designated for publication and shall not
considered as precedent, except under the respective doctrines of claim preclusion, issue preclusion, the
law of the case or as to other applicable evidentiary doctrines.
2 Ex. P.
3 Ex. A.
4 On May 7, 2018, this Court entered an order which authorized ECMC to intervene as a party-
in-interest and thereby dismissing all other parties from the suit. ECMC is a non-profit corporation
organized under the laws of Minnesota that was created under the direction of the U.S. Department of
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9. The Plaintiff acknowledges that the indebtedness currently owed to ECMC is an
educational loan “made, insured or guaranteed by a governmental unit, or made
under any program funded in whole or in part by a governmental unit . . . ” which
meets the statutory definition of 11 U.S.C. § 523(a)(8)(A).
10. On September 11, 2017, the Plaintiff, acting in a pro se capacity, filed a petition
for relief under Chapter 7 of the Bankruptcy Code in this Court, the Hon. Brenda
T. Rhoades, presiding.5
11. The Plaintiff’s spouse, Viktoriya Epperson (“Ms. Epperson”), did not join in the
bankruptcy petition.
12. The bankruptcy schedules filed under oath by the Plaintiff reveal that he owns a
residential homestead in Allen, Texas which he valued in 2017 at $310,000,
subject to an approximate mortgage debt of $192,000, thereby enjoying an equity
cushion in that exempt real property asset of approximately $118,000.6
13. In addition to his mortgage indebtedness of $192,000, the Plaintiff’s initial
bankruptcy schedules filed on the Petition Date revealed no priority debt and
unsecured indebtedness totaling $29,146.70, excluding the student loan
indebtedness currently under review, which was comprised primarily of accrued
credit card indebtedness.7
14. An additional $2,208.22 of unsecured indebtedness was added through an
amended Schedule E/F filed on February 16, 2018.8
Education to provide specialized services to the department as its statutory representative responsible for
defending student loan dischargeability claims in the context of consumer bankruptcies. See generally,
Note, Forgive and Forget: Bankruptcy Reform in the Context of For-Profit Colleges, 128 HARV. L. REV.
2018, 2036 (2015).
5 Ex. F at 1.
6 Ex. F at 23. But see Ex. Q showing that the 2020 assessed value of the Plaintiff’s home by the
Collin County Appraisal District was $325,371.
7 Ex. F at 11-34.
8 Amended Schedule E/F [dkt #11] in bankruptcy case number 17-42001.
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15. The Plaintiff also disclosed typical personal property assets for which exemptions
were claimed and allowed.
16. A Notice of No Distribution was filed by the Chapter 7 Trustee on November 3,
2017.9
17. On August 18, 2018, an order of discharge was entered in Plaintiff’s favor in the
underlying Chapter 7 bankruptcy case.10
18. Despite having received a discharge of a considerable amount of unsecured debt,
the Plaintiff nevertheless contends that his ongoing obligation to address his
student loan indebtedness in the post-discharge period imposes an undue hardship
upon himself and his dependents.
19. Thus, on February 23, 2018, the Plaintiff initiated the present action seeking a
discharge of his student loan indebtedness to ECMC as an “undue hardship” within
the meaning of § 523(a)(8) of the Bankruptcy Code.
20. The Plaintiff was the only witness in support of his case-in-chief.
21. With regard to his student loan indebtedness, the principal balance of the
Plaintiff’s loans as of April 20, 2018 was $39,246.14, at an interest rate of 9%.11
22. The Plaintiff first contends that he and his family are currently unable to maintain
a minimal standard of living because of his ongoing obligation to satisfy his
student loan obligations which remain due and owing to the Defendant.
23. The Plaintiff is currently employed on a full-time basis as a Quality Assurance
Engineer for Abbott Laboratories for which he evaluates the efficacy and safety of
various healthcare-related products to determine their fitness for distribution and
sale to certain labs and medical hospitals.
9 The Trustee’s Notice is not assigned a docket number in the CM/ECF system. It appears
between dkt ## 8-9 in bankruptcy case 17-42001.
10 Order of Discharge [dkt #24] in bankruptcy case number 17-42001.
11 Ex. L at 24.
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24. As of November 2020, the Plaintiff has been employed by Abbott for four (4)
years.
25. The Plaintiff currently enjoys a gross monthly income of $7,176 arising from his
employment at Abbott, for an annual gross salary of $86,112.12
26. Over his four-year tenure at Abbott, the Plaintiff has received multiple
performance-based pay increases, although such increases are provided solely at
his employer’s discretion.
27. The Plaintiff deducts on a pretax basis the following monthly amounts:13
(a) health insurance premiums: $ 516
(b) flex payments: $ 121
(c) 401(k) contribution: $ 215
28. At the present time, Ms. Epperson holds part-time employment with Aurora Home
Health as a registered nurse involved in home health care in Plano, Texas.14
29. Ms. Epperson was forced to relinquish her role as a full-time nurse in 2017 due to
a chronic illness.
30. Based upon her earnings of $10,330 in the first half of 2020,15 Ms. Epperson
presently has a current gross monthly salary of approximately $1,721.00 per
month.16
12 The Plaintiff is paid $3,312 in gross salary on a bi-weekly basis. Ex. 13 at 1.
13 Ex. 13 at 1.
14 It is now well-settled that § 523(a)(8) of the Code requires bankruptcy courts to consider the
income of a non-debtor spouse when deciding whether excepting a debtor’s student loans from discharge
will impose an “undue hardship” on the debtor. Lozada v. Educ. Credit Mgmt. Corp. (In re Lozada), 594
B.R. 212, 224 (Bankr. S.D.N.Y. 2018); Augustin v. U.S. Dep’t. of Educ. (In re Augustin), 588 B.R. 141,
150 (Bankr. D. Md. 2018); Wynn v. Educ. Credit Mgmt. Corp. (In re Wynn), 378 B.R. 140, 148 (Bankr.
S.D. Miss. 2007); Barron v. Tex. Guar. Student Loan Corp. (In re Barron), 264 B.R. 833, 838 (Bankr.
E.D. Tex. 2001) and cases cited therein.
15 Ex. 13 at 3.
16 This is a reduction of $2,362 from the salary figure provided for Ms. Epperson in the
Plaintiff’s Schedule I filed in his bankruptcy case in 2017. Ex. F at 37.
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31. Thus, the Plaintiff’s household enjoys a gross monthly income of $8,897 per
month, for a gross annual income total of $106,764.
32. The Plaintiff testified that he exercises very little to no monetary control in
connection with his family’s household budget.
33. Significant household expenses, such as mortgage payments and/or utility
expenses, are paid directly by Ms. Epperson.
34. The Plaintiff acknowledged at trial that he is unable to manage the household
finances because he “lacks the capacity” to deal sufficiently with bills and
household expenses as they become due.
35. At all relevant times, the Plaintiff and his spouse maintain separate checking and
savings accounts which are kept segregated, according to the Plaintiff, as a
consequence of his inability to sufficiently control the household’s day-to-day
expenditures.
36. Thus, the Plaintiff and his spouse operate their household under an agreement in
which they independently deposit and transfer sums into a shared savings account
as a mechanism to address their monthly expenditures.17
37. Therefore, the Plaintiff could not testify regarding the status of banking activities
by his non-debtor spouse.
38. The Plaintiff has three children: ages, 8, 13, and 13.
39. The following constitutes the Plaintiff’s estimated monthly expenses as expressed
in his schedules filed in his bankruptcy case, as subsequently modified by his trial
testimony:
Expense Amount
Mortgage $1,860.00
Electricity $300.00
Water $75.00
Telephone $390.00
Internet $75.00
17 No monthly statements from the shared Wells Fargo savings account appear in the record.
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Food $1,000.00
Children’s Private School Tuition $1,279.00
Clothing $100.00
Medical/Dental $200.00
Gas $185.00
Recreation $200.00
Car 1 $280.00
Car 2 $480.00
Vehicle Registration $80.00
Personal Care/Grooming $100.00
HOA Fees $50.00
Housekeeping $45.00
Car Insurance $290.00
Total: $6,989.00
40. The Plaintiff and his spouse elect to send all of their children to private school at
an average aggregate cost of nearly $1,300 per month.
41. The Plaintiff testified regarding unanticipated medical and dental procedures that
are often needed for his children which reduce the amount of discretionary funds
available to the household.
42. The Plaintiff also testified that he suffers with mental health issues for which he
has been hospitalized in the past.
43. The Plaintiff testified that he had been previously diagnosed with Bipolar disorder.
44. The Plaintiff testified that he suffers from an innate disposition toward suicidal
ideation, which has led him to attempt suicide on three separate occasions.
45. The Plaintiff stated that he often suffers from impaired concentration, as well as
moderate to severe mood swings, when in the midst of a depressive episode.
46. The Plaintiff insists that his condition is worsening, predicts that he will not be
able to maintain employment for more than a year, and worries that he will be
terminated as a consequence of his bipolarism.
47. The Plaintiff believes that his depressive condition will eventually deteriorate
beyond his capacity to control.
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48. The Plaintiff offered no corroborating testimony from any doctor, or any other
medical source, regarding the status or treatment options related to his medical
prognosis.
49. Although the Plaintiff’s medical condition may have adversely impacted his ability
to regulate his emotions for periods of time, it has not prevented him from
obtaining gainful employment, nor has it yet significantly impacted his current
employment status as an engineer at Abbott Laboratories.
50. The Plaintiff’s household has no significant cash reserves to the Plaintiff’s
knowledge.
51. The Plaintiff insists that “we are unable to meet our bills” and that incessant
demands to address various needs of his family, including his own medical
condition, preclude the availability of funds to address the student loan
indebtedness.
52. Yet, an “[i]nability to pay one’s debts by itself cannot be sufficient [for purposes
of § 523(a)(8)]; otherwise all bankruptcy litigants would have undue hardship. The
exception would swallow the rule, and Congress’s restriction would be
meaningless. This is the genesis of the Brunner/Gerhardt standard, which inquires
whether requiring a debtor to repay a student loan is likely to prevent the debtor
from maintaining a minimal standard of living over the course of the repayment
period despite good faith efforts to fulfill her obligations.” Thomas v. U.S. Dep’t.
of Educ. (In re Thomas), 931 F.3d 449, 451 (5th Cir. 2019).
53. While certain categories of expense may certainly be characterized as beyond the
Plaintiff's control, the Plaintiff failed to present sufficient evidence to demonstrate
that he has attempted all feasible avenues at his disposal to manage his family’s
budget in an effort to address his student loan obligations.
54. The Plaintiff testified to his reluctance to adjust his housing expense to a lower
amount.
55. The Plaintiff has failed to demonstrate by a preponderance of the evidence that his
current housing costs are necessary for him to maintain a minimal standard of
living.
56. Other than expressing his opinion, the Plaintiff produced no evidence regarding
actual housing alternatives in his area.
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57. The Plaintiff has failed to demonstrate by a preponderance of the evidence that
downsizing from his current housing arrangement is infeasible or that it would not
result in a degree of monthly savings sufficient to permit him to pay his student
loan obligation while maintaining a minimal standard of living.
58. Apart from his natural affection for them, the Plaintiff provided no justification for
the private school tuition costs that he has elected to pay on behalf of his children.
59. Absent a compelling reason, a debtor's decision to send a child to a private school
reveals a discretionary use of income and reflects a conscious decision by a debtor
to ignore the mandated repayment of his student loan obligation. Russ v. Tex.
Guar. Student Loan Corp. (In re Russ), 365 B.R. 640, 645 (Bankr. N.D. Tex.
2007).
60. Without discounting the reality of economic stress created by particular
expenditures which the Plaintiff and his spouse have chosen to make, the Plaintiff
lives far above what can be fairly described as a minimal standard of living.
61. While certain categories of expense may fairly be characterized as beyond his
control, the evidentiary record reflects little effort by the Plaintiff to control
monthly expenditures or to impose reasonable household budgetary restrictions.
62. The Plaintiff essentially suggested that he should possess the discretion to provide
for his family in whatever manner or mode he selects in his best judgment without
reference to the fulfillment of his student loan obligation.
63. His desire to supply a higher standard of living for his spouse and his children is
understandable and admirable, but it is not consistent with the test that this Court is
required to apply with regard to the discharge of his student loan indebtedness.
64. The expenses incurred by the Plaintiff's household clearly reflect an elective,
discretionary diversion of disposable income.
65. The Plaintiff has failed to demonstrate by a preponderance of the evidence that he
has taken every fair and reasonable measure to sufficiently minimize his household
expenses.
66. The Plaintiff has failed to demonstrate by a preponderance of the evidence that,
based upon his current income and expenses, he cannot maintain a minimal
standard of living for himself and his dependents unless he receives a discharge of
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his student loan indebtedness.
67. “A debtor need not live in abject poverty to satisfy the minimal standard of living
requirements, but he must demonstrate that he has taken steps to minimize his
expenses and maximize his income.” Tenn. Student Assistance Corp. v. Hornsby
(In re Hornsby), 144 F.3d 433, 438 (6th Cir.1998).
68. Since the Plaintiff has failed to establish an inability to maintain a minimal
standard of living while fulfilling his student loan obligation, as required by the
first Brunner factor, no purpose is served by an examination of whether any
inability will persist into the repayment period, particularly since the second prong
of Brunner is “exceptionally demanding” and requires a showing that
circumstances beyond his control have resulted in a “total incapacity to repay the
debt now and in the future.” Thomas, 931 F.3d at 451.
69. To the extent any of these findings of fact constitute conclusions of law, the Court
expressly adopts them as such.
CONCLUSIONS OF LAW
1. This Court has subject matter jurisdiction to consider the complaint pursuant to 28
U.S.C. §§ 1334 and 157. This Court has authority to enter a final judgment on all
issues raised in this adversary proceeding since it statutorily constitutes a core
proceeding as contemplated by 28 U.S.C. § 157(b)(2)(I) and (O) and meets all
constitutional standards for the proper exercise of full judicial power by this Court.
2. Section 523(a)(8) of the Bankruptcy Code excepts from an individual’s discharge
“a loan made, insured or guaranteed by a governmental unit, or made under any
program funded in whole or in part by a governmental unit . . . unless excepting
such debt from discharge . . . will impose an undue hardship on the debtor and the
debtor's dependents.”
3. “In its entirety, § 523(a)(8) balances two competing policy objectives: (1) the
debtor's right to a fresh start; and (2) the need to protect the financial integrity of
educational loan programs and to induce lenders to lend to students who cannot
qualify for loans under traditional underwriting standards.” De La Rosa v Kelly (In
re Kelly) 582 B.R. 905, 909 (Bankr. S.D. Tex. 2018).
4. “The debtor bears the burden of proof on each prong of the test and if even one
prong is not satisfied, the debt is not dischargeable.” Lewis v. Mass. Higher Educ.
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Assistance Corp. (In re Lewis), 2020 WL 489222 (Bankr. S.D. Miss. Jan. 29,
2020).
5. “The appropriate standard of proof for § 523(a)(8) is a preponderance of the
evidence. Johnson v. U.S. Dep’t. of Educ. (In re Johnson), 541 B.R. 759, 764
(Bankr. N.D. Ala. 2015).
6. Surprisingly, there is no precise definition of the term “undue hardship.” It is not
defined in the Bankruptcy Code nor has any particular judicial definition been
endorsed by any decision of the United States Supreme Court. Kettler v. Great
Lakes Higher Educ. Serv. Corp. (In re Kettler), 256 B.R. 719, 722 (Bankr. S.D.
Tex. 2000).
7. However, as courts have attempted to balance a debtor's need for a fresh start with
the recognized need to protect student loan programs and their participants, a
growing consensus has emerged regarding the evidentiary foundation necessary to
establish an undue hardship.
8. Most of the circuit courts of appeal have endorsed a three-prong test first
articulated by the Second Circuit Court of Appeals in Brunner v. New York State
Higher Educ. Serv. Corp., 831 F.2d 395 (2d Cir. 1987) under which a debtor is
required to show:
(1) that the debtor cannot maintain, based on current income and expenses,
a "minimal" standard of living for himself and his dependents if
forced to repay the loan;
(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 loan; and
(3) that the debtor has made good faith efforts to repay the loan.
Id. at 396.
9. This test was expressly adopted in 2003 by the Fifth Circuit. U.S. Dep’t. of Educ.
v. Gerhardt (In re Gerhardt), 348 F.3d 89 (5th Cir. 2003).18
18 Having originated in the Second Circuit, the Brunner test has also now been adopted in the
Third, Fourth, Sixth, Seventh, Ninth and Eleventh Circuits. Third: Penn. Higher Educ. Assistance Agency
v. Faish (In re Faish), 72 F.3d 298, 306 (3d Cir. 1995); Fourth: Educ. Credit Mgmt. Corp. v. Frushour (In
re Frushour), 433 F.3d 393 (4th Cir. 2005); Sixth: Oyler v. Educ. Credit Mgmt. Corp. (In re Oyler), 397
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10. “The test is conjunctive; a debtor's failure to satisfy any of the prongs means the
debtor cannot establish that the student loans are an undue burden, and the student
loans cannot be discharged.” Little v. U.S. Dep’t. of Educ. (In re Little), 607 B.R.
853, 858 (Bankr. N.D. Tex. 2019); Russ, 365 B.R. at 644.
11. Under the first Brunner element, the Debtor is required to show that he cannot
maintain, based on his current income and expenses, a “minimal” standard of
living for himself and his dependents if he is forced to repay the student debt.
12. “The first part of Brunner—that the debtor cannot maintain a minimal standard of
living while repaying the student loan debt—comports with the legislative policy
behind § 523(a)(8), that student loans should not as a matter of policy be
dischargeable before [the debtor] has demonstrated that for any reason he is unable
to earn sufficient income to maintain himself and his dependents and to repay the
educational debt.” Educ. Credit Mgmt. Corp. v. Polleys, 356 F.3d 1302, 1309–10
(10th Cir. 2004) (internal quotations omitted).
13. This analysis is actually a two-step process encompassing: (1) an evaluation of the
debtor’s present standard of living based upon his present lifestyle attributes which
appear from the record, and (2) whether the forced repayment of the student loan
obligation will preclude the debtor from maintaining a minimal standard of living.
Hoffman v. Tex. Guar. Student Loan Corp. (In re Williams) 2017 WL 2303498, at
*5 (Bankr. E.D. Tex. May 25, 2017) (citing Naranjo v. Educ. Credit Mgmt. Corp.
(In re Naranjo), 261 B.R. 248, 254-55 (Bankr. E.D. Cal. 2001)).
14. “The first step in determining the minimal standard prong is to determine the
debtor's monthly income. Next, the Court reviews the debtor's actual monthly
expenses and determines which are ‘reasonable and necessary.’ The Court must
apply its common sense knowledge gained from ordinary observations in daily life
and general experience to determine whether Debtor's expenses are reasonable and
F.3d 382, 295 (6th Cir. 2005); Seventh: Ill. Student Assistance Comm’n v. Roberson (In re Roberson),
999 F.2d 1132, 1135 (7th Cir. 1993); Ninth: United Student Aid Funds, Inc. v. Pena (In re Pena), 155
F.3d 1108, 1111–12 (9th Cir. 1998); Tenth: Educ. Credit Mgmt. Corp. v. Polleys (In re Polleys), 356 F.3d
1302 (10th Cir. 2004); and Eleventh: Hemar Ins. Corp. v. Cox (In re Cox), 338 F.3d 1238, 1241–42 (11th
Cir. 2003). The Eighth Circuit has elected to embrace a “totality of the circumstances” test in lieu of the
Brunner factors. Educ. Credit Mgmt. Corp. v. Jesperson (In re Jesperson), 571 F.3d 775, 779 (8th Cir.
2009). The First Circuit saw “no need ... to pronounce our views of a preferred method of identifying a
case of undue hardship,” Nash v. Conn. Student Loan Found. (In re Nash), 446 F.3d 188, 190 (1st Cir.
2006), although its bankruptcy appellate panel has criticized Brunner. Bronsdon v. Educ. Credit Mgmt.
Corp. (In re Bronsdon), 435 B.R. 791, 798–800 (B.A.P. 1st Cir. 2010).
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necessary.” Graddy v. Educ. Credit Mgmt. Corp., 615 B.R. 336, 348 (N.D. Ga.
2020).
15. As a neighboring court recently observed,
Tight finances [are] not enough. Generally, maintaining a
minimal standard of living requires that a debtor be able to
purchase “basic necessities,” but what qualifies as a basic
necessity varies among courts. Some courts adopt a narrow
view, including only food, clothing, housing, and medical
treatment. Other courts are more generous and have held that
basic necessities should also include transportation, hygiene
expenses, and modest recreation. Under either definition,
courts agree that after purchase of basic necessities, a debtor
may not use any discretionary income to the detriment of [the
debtor’s] student loan creditors. If some “belt-tightening” in
the debtor’s expenses could create an ability to repay, [a
debtor] cannot satisfy the first prong.
Trejo v. Navient (In re Trejo), 2020 WL 1884444 at *5 (Bankr. N.D. Tex. Apr. 15,
2020).
16. In other words, the “minimal standard of living” element also requires the debtor
to demonstrate that he or she is attempting to “minimize living expenses and
maximize financial resources.” Justice v. Educ. Credit Mgmt. Corp. (In re
Justice), 2016 WL 6956642, at *3 (Bankr. N.D. Miss. Nov. 28, 2016).
17. A debtor seeking a hardship discharge of student loan indebtedness under
§ 523(a)(8) is not “entitled to maintain whatever standard of living [he] has
previously attained, nor the level [he] would maintain if required to repay the debt.
‘Minimal’ does not mean preexisting, and it does not mean comfortable.” Halatek
v. U.S. Dep’t. of Educ. (In re Halatek), 592 B.R. 86, 97 (Bankr. E.D.N.C. 2018).
18. “A minimal standard of living is living within the strictures of a frugal budget in
the foreseeable future . . . ” Murray v. Educ. Credit Mgmt. Corp. (In re Murray),
563 B.R. 52, 58 (Bankr. D. Kan. 2016).
19. The test does not require a debtor to demonstrate that repayment of the loan would
cause the Plaintiff and his family to live at or below the poverty level. Hutsell v.
Navient (In re Hutsell), 620 B.R. 604, 612 (Bankr. N.D. Ohio 2020); Augustin, 588
B.R. at 149.
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20. However, a minimal standard of living “does not accommodate luxury-type
expenses.” Halatek, 592 B.R. at 98; Crawley v. Educ. Credit Mgmt. Corp. (In re
Crawley), 460 B.R. 421, 436 (Bankr. E.D. Pa. 2011).
21. The evidence presented by the Debtor does not reflect compliance with the
established legal requirement that “a debtor has a heightened obligation to apply
his or her income to the repayment of a student loan before the loan may be
discharged under § 523(a)(8).” Miller v. Sallie Mae, Inc. (In re Miller), 409 B.R.
299, 319 (Bankr. E.D. Pa. 2009).
22. Absent a compelling reason, a debtor's decision to send a child to a private school
reveals a discretionary use of income that reflects a conscious decision by a debtor
to ignore the mandated repayment of his student loan obligation. Russ, 365 B.R. at
645.
23. Indeed, though rare even under the more liberal standards of a Chapter 13 plan
confirmation context, this Court has previously determined that private education
expenses were “reasonable and necessary” under circumstances in which the
debtor's son had a medically-documented learning disability and a social disorder
which were proven through medical testimony. In re Webb, 262 B.R. 685 (Bankr.
E.D. Tex. 2001).
24. However, “[a]lthough compelling circumstances may distinguish a given case, the
authorities uniformly hold that a debtor's mere preference for private schooling is
insufficient to qualify the attendant expense as necessary and reasonable.” Educ.
Credit Mgmt. Corp. v. Savage (In re Savage), 311 B.R. 835, 841 (B.A.P. 1st Cir.
2004).
25. Instead, “private school tuition is most often considered a luxury expense that
amounts to a debtor requiring his or her creditors to donate toward his children's
education.” Id. at n. 9 [concluding that since $322.50 in private school expenses
“can be eliminated from [Debtor’s] budget without creating undue hardship, her
student loans cannot be discharged under § 523(a)(8).”].
26. Because the Plaintiff has failed to establish the first element of the Brunner test by
a preponderance of the evidence, the Court’s inquiry regarding the dischargeability
of the Plaintiff’s student loan obligation concludes and the referenced student loan
remains nondischargeable.
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27. The Court need not decide whether the Plaintiff would have satisfied the second
and third elements of the Brunner standards. Faish, 72 F.3d at 306; Davis v.
Conduent (In re Davis), 608 B.R. 693. 705 (Bankr. N.D. Ill. 2019) [“Such failure
to succeed on the first element of the Brunner test . . . means that the student loans
cannot be discharged.”].
28. Without regard to the foregoing result, the Court feels compelled to respond to the
Plaintiff’s persistent urging throughout this proceeding for this Court to abandon
the strictness of the Brunner test and apply a more liberal ad hoc standard of
review.
29. This Court, of course, has no such freedom and is bound by the precedents
established by the Fifth Circuit Court of Appeals in this regard.
30. However, the Fifth Circuit recently responded to a similar plea from a debtor with
sympathetic circumstances with this unequivocal response:
No doubt because so many student loans are ultimately
backed by the taxpayers, Congress intended to make student
loan debt harder to discharge than other types of consumer
debt, and the courts’ adoption of a linguistically accurate and
demanding standard fulfills that intent. The consequence of
the Brunner/Gerhardt test is that sympathetic debtors . . . are
held to the same standard as debtors who are less sympathetic.
But that is an outcome for Congress to address, should it
desire. The text of § 523(a)(8) draws no distinction between
debtors perceived as sympathetic or unsympathetic. It is
undoubtedly true that each case of claimed “undue hardship”
must be examined on its own facts, but reducing the
Brunner/Gerhardt test to a nebulous ‘totality of the
circumstances’ standard risks creating intolerable
inconsistency of results. The proposed weaker standard
would inevitably judicially expand an area of bankruptcy law
that Congress has unambiguously sought to restrict.
Thomas, 931 F.3d at 454-55.
31. As the Circuit has advised, “Ultimate policy issues . . . are for Congress, not the
courts.” Id. at 455.
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32. Because the Plaintiff, Bradley S. Epperson, has failed to establish by a
preponderance of the evidence the existence of an undue hardship pursuant to
§ 523(a)(8) of the Bankruptcy Code, in accordance with the three-prong Brunner
test adopted by the Fifth Circuit in U.S. Dept. of Educ. v. Gerhardt (In re
Gerhardt), 348 F.3d 89 (Sth Cir. 2003), the Court concludes that the relief sought
by the Plaintiff's complaint must be denied.
33. To the extent any of these conclusions of law constitute findings of fact, the Court
expressly adopts them as such.
34. An appropriate judgment shall be entered which is consistent with these findings
and conclusions.
Signed on 02/24/2021
a . . □
fede
THE HONORABLE BILL PARKER
CHIEF UNITED STATES BANKRUPTCY JUDGE
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