Student Loans in Chapter 7 and Chapter 13 - Prof. Michael D. Sabbath SBLI/W. Homer Drake, Jr. Endowed Chair in Bankruptcy Law Mercer University ...
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Student Loans in Chapter 7
and Chapter 13
Prof. Michael D. Sabbath
SBLI/W. Homer Drake, Jr.
Endowed Chair in Bankruptcy Law
Mercer University School of LawTABLE OF CONTENTS
I. Introduction .......................................................................................................................1
II. Student Loan Payments and the Means Test ....................................................................1
A. Means Test Generally – Presumption of Abuse ................................................... 1
B. Rebutting the Presumption -- Special Circumstances Generally .......................... 3
C. Special Circumstances and Student Loans ........................................................... 6
1. Student Loans and Rebutting the Presumption of Abuse ..............................6
2. Student Loans and Calculating Projected Disposable Income ....................10
III. Discharge of Student Loans and Undue Hardship ..........................................................12
A. Discharge Exception for Educational Loans....................................................... 12
B. Discharge Based on “Undue Hardship” .............................................................. 13
1. Totality of the Circumstances Test ..............................................................13
2. The Brunner Test 15
3. Need for Expert Testimony? .......................................................................20
4. Failure to Enroll in an IRCP and Lack of “Good Faith” .............................24
5. Partial Discharge 28
IV. More Favorable Treatment to Student Loan Creditors in Chapter 13 ............................29
A. Separate Classification Generally ....................................................................... 29
V. Separate Classification of Student Loan Debt. ...............................................................31
VI. BAPCPA and New Section 1322(b)(10) ........................................................................34
iI. INTRODUCTION
As the costs of higher education have increased dramatically over time, individuals upon
leaving school are often faced with huge amounts of student loan debt. Some of these
individuals, when faced with difficult financial situations, determine that bankruptcy is the only
way, or perhaps the easiest way, to deal with their problems. In this paper, I will discuss a few of
the issues that arise concerning the treatment of student loans in bankruptcy.
II. STUDENT LOAN PAYMENTS AND THE MEANS TEST
A. Means Test Generally – Presumption of Abuse
Pursuant to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
(hereinafter “BAPCPA”), certain individual debtors seeking relief under Chapter 7 of the
Bankruptcy Code are subject to a statutorily prescribed test to determine the debtor’s ability to
repay creditors. See 11 U.S.C. § 707(b)(2). Employing this test (generally called the “means
test,” though this term does not appear in the Bankruptcy Code), the court must determine
whether an individual debtor can use Chapter 7 or whether she should be limited to Chapter 11
or Chapter 13 because she has the “means” to make meaningful payments to creditors.
Speaking very generally, the means test calculation begins by comparing the debtor’s
income with the median income of debtors with the same size household in the debtor’s home
state. If the debtor’s income is equal to or below the state median (which is, by far, the most
common situation), the debtor’s case may not be dismissed under the means test of § 707((b)(2),
though it still may be dismissed under the court’s discretionary standard for abuse found in §
707(b)(1).
A debtor whose income is above the state median must make a rather complicated
calculation of a combination of presumed and actual living expenses which are then deducted
form the debtor’s income to determine the amount of her surplus income. The basic premise of
the means test found in § 707(b)(2) is that if debtors have sufficient surplus income so that they
can afford to pay unsecured creditors at least between $6,575 and $10,950 over five years, they
should make these payments instead of employing Chapter 7 to avoid making these payments.
When sufficient income is available to make these payments but the debtor nevertheless seeks
relief under Chapter 7, a presumption of abuse arises. If the case is presumed to be an abuse, thecourt may dismiss it or, with the debtor’s consent, convert the case to Chapter 11 or Chapter 13.
See 11 U.S.C. § 707(b)(1).
Many of the expenses that are to be deducted from income are unrelated to the debtor’s
actual living expenses but instead depend upon a set of expense guidelines used by the IRS as the
basis for negotiation when establishing repayment schedules with delinquent taxpayers. These
include expenses (based on National Standards) for food, clothing, household supplies, personal
care, and expenses (based on Local Standards) for housing, utilities, and transportation. In
addition, a debtor may deduct certain actual monthly expenses, including those specified as
“Other Necessary Expenses” by the IRS in § 5.15.1.10 of the IRS Manual. The “Other
Necessary Expenses” consist of a nonexclusive list of certain expenses generally related to
family health and welfare or the production of income, and include “such expenses as child care,
court ordered payments, including alimony, support and other court-ordered payments (such as
restitution), expenses for care of the elderly, invalid or handicapped, education for special needs
children if suitable education is not available from public schools, medical and dental expenses,
taxes, involuntary deductions from wages, including union dues, uniforms, etc., term life
insurance premiums, mandatory pension loan repayments or contributions, and withholding
taxes, optional telephone service, and Internet service.” See generally 6 COLLIER ON
BANKRUTPCY§ 707.05[2][c] (15th ed. rev. 2007).
According to the IRS Manual, “Other Necessary Expenses” also include student loans if
they are secured by the federal government. Because of this, debtors have sometimes argued
that, in applying the means test, certain student loan payments should be included in those
expenses that are deducted from the debtor’s income. Section 707(b)(2)(A)(ii)(I), however,
specifically provides that “Notwithstanding any other provision of this clause, the monthly
expenses of the debtor shall not include any payment for debts.” Because student loans
payments are “payments for debts,” several courts have concluded, rightfully, that student loan
payments are not a permissible deduction from projected disposal income under § 707(b)(2)(A).
See In re Knight, 370 B.R. 429, 436-37 (Bankr. N.D. Ga. 2007); In re Delbecq, 368 B.R. 754,
755-56 (Bankr. S.D. Ind. 2007).
2B. Rebutting the Presumption -- Special Circumstances Generally
Even when the presumption of abuse arises from application of the means test, the debtor
may rebut the presumption by demonstrating “special circumstances” pursuant to § 707(b)(2)(B)
justifying additional expenses or adjustments of the debtor’s income. Section 707(b)(2) includes
both procedural and substantive requirements. Regarding the procedural requirements, §
707(b)(2)(B)(ii) provides that the debtor must: (1) itemize each expense or adjustment to income,
(2) support each expense or adjustment to income with documentation, (3) provide a detailed
explanation of the special circumstances that make such expenses or adjustments to income
necessary and reasonable, and (4) attest under oath to the accuracy of any information provided.
See generally In re Tamez, No. 07-60047-RCM, 2007 WL 2329805 at *4-*6 (Bankr. W.D. Tex.
Aug. 13, 2007). This would appear to call for a very strong evidentiary showing from the debtor.
The substantive requirement is set out in § 707(b)(2)(B)(i), which provides that a debtor
seeking to rebut the presumption of abuse must demonstrate “special circumstances, such as
serious medical condition or a call or order to active duty in the Armed Forces, to the extent such
special circumstances that justify additional expenses or adjustments of currently monthly
income for which there is no reasonable alternative.” Courts are increasingly being called upon
to determine whether a debtor sufficiently established special circumstances to rebut the
presumption of abuse. See generally In re Heath, 371 B.R. 806 (Bankr. E.D. Mich. 2007)
(providing brief synopses of a number of recent cases).
A number of courts, feeling constrained by the specific examples of special
circumstances found in the statute, have suggested that the special circumstances exception
should be strictly construed. See, e.g., In re Sparks, 360 B.R. 224, 230 (Bankr. E.D. Tex. 2006).
Some courts have concluded that special circumstances should rise to the same level as the
statutorily recognized examples of a serious medical condition or call to active duty. See In re
Delunas, No. 06-43133-705, 2007 WL 737763 at *2 (Bankr. E.D. Mo. March 6, 2007); In re
Johns, 342 B.R. 626, 629 (Bankr. E.D. Okla. 2006). Other courts have decided that §
707(b)(2)(B)’s special circumstances contemplates circumstances beyond a debtor’s reasonable
control, or at least that the circumstances be unforeseeable. See In re Tranmer, 355 B.R. 234,
251 (Bankr. D. Mont. 2006) (“Section 707(b)(2)(B)’s ‘special circumstances’ contemplates
circumstances beyond a debtor’s reasonable control, such as a ‘serious medical condition’ or a
call or order to active duty in the Armed Forces.”)
3As explained by the court in In re Castle, 362 B.R. 846, 851 (Bankr. N.D. Ohio 2006):
To be sure, the two examples of “special circumstances” in § 707(b)(2)(B)(i) are just that:
examples, and thus do not constitute the only types of circumstances which may be used to rebut
a presumption of abuse. But they do show a commonality; they both constitute situations which
not only put a strain on the debtor’s household budget, but they arise from circumstances
normally beyond the debtor’s control. Under the statutory interpretation canon of ejusdem
generis, a court is to limit the sphere of permissible “special circumstance” to ones having such
similar traits and characteristics. This interpretive doctrine, meaning literally “of the same kind,”
holds that a court is to interpret legislatively provided examples of a specific nature as typical of
the general category covered. [citations omitted].
The court in In re Lightsey, No. 06-40896, 2007 WL 2363025 at *5, fn. 4 (Bankr. S.D.
Ga. July 16, 2007), found support in BAPCPA’S legislative history (remarks by senators
Grassley, Nelson and Hatch) for the position that the special circumstances exception was
intended to allow judges “to consider cases where catastrophic illnesses or other unexpected
financial calamities that have impacted a family or individual to the point where their debts are
too heavy a load to carry” (emphasis added by court). The court reasoned that “[t]he [special
circumstances] exception does not permit every conceivable unfortunate or ‘unfair’ circumstance
to rebut the presumption of abuse, but includes only those circumstances that cause higher
household expenses or adjustments of income ‘for which there is no reasonable alternative,’ i.e.
they are unforeseeable or beyond the control of the debtor.” Lightsey, 2007 WL 2363023 at *3
Not all courts, however, have felt so constrained by the specific examples found in the
statute. There is judicial support for the position that special circumstances is a fact-specific
consideration, and that courts may exercise broad discretion in determining whether a particular
case presents special circumstances. See, e.g., In re Haman, 366 B.R. 307, 313 (Bankr. D. Dela.
2007) (statute does not suggest or mandate that “special circumstances” be outside the control of
the debtor); In re Robinette, No. 7-06-10585 SA, 2007 WL 2955960 at * 4 (Bankr. D.N.M. Oct.
2, 2007) (“Nothing in the language of the statute requires that the circumstance be an act outside
of a debtor’s control. Nor must the circumstances be unanticipated. The Court should approach
the issue of special circumstances on a case-by-case basis.” [citations omitted]); In re Graham,
363 B.R. 844, 850 (Bankr. S.D. Ohio 2007) (“Nothing in the statute suggests or mandates that
the ‘special circumstances’ be outside the control of the debtor. Had Congress intended to place
4such a restriction on the nature of special circumstances it envisioned, Congress knows well how
to construct appropriate language.”); In re Templeton, 365 B.R. 213, 216 (Bankr. W.D. Okla.
2007) (“First “’special circumstances’ is a fact-specific consideration. Also, courts are given
broad discretion in making a determination if a particular case presents ‘special
circumstances.’”[citations omitted]). As the court explained in In re Knight, 370 B.R. 429, 437-
38 (Bankr. N.D. Ga. 2007):
Although Congress thus identified “serious medical condition or a call or order to active
duty in the Armed Forces” as two instances that may constitute special circumstances, the term
itself is not exclusive to those factors, nor do they serve as a benchmark for defining special
circumstances. . . . As a number of courts have determined, the term “special circumstances”
requires “a fact-specific, case-by-case inquire into whether the debtor has a ‘meaningful ability’
to pay his or her debts in light of an additional expense or adjustment to income not otherwise
reflected in the means test calculation.” [citing In re Delbecq, 368 B.R. 754, 758-59 (Bankr. S.D.
Ind. 2007)]. A special circumstance is one that, if the debtor is not permitted to adjust her
income or expenses accordingly, results in a demonstrable economic unfairness prejudicial to the
debtor. (citation omitted).
Several courts, after examining the legislative history to BAPCPA, found support for the
position that the special circumstances exception should be interpreted broadly. For example, the
court in In re Delbecq, 368 B.R. 754 (Bankr. S.D. Ind. 2007), after discussing the Senate
Judiciary Committee’s Report concerning this provision, found nothing to indicate that the
explicit examples included in § 707(b)(2)(B) were intended to define, qualify or otherwise limit
the meaning of “special circumstances.” Id. at 758. That court found that “[t]he Report strongly
suggests to the Court that the term ‘special circumstances’ requires a fact-specific, case-by-case
inquiry into whether the debtor has a ‘meaningful ability’ to pay his or her debts in light of an
additional expense or adjustment to income not otherwise reflected in the means test
calculation.” Id. at 758. Similarly, the court in In re Haman, 366 B.R. 307, 314 (Bankr. D. Del..
2007), concluded that “the legislative history of BAPCPA indicates that the examples of special
circumstances set forth in subsection (i) were meant to be expansive – not limiting” and that “the
intent behind the examples was not to limit judicial discretion or to provide a definition of
special circumstances, but rather, was to ensure that ‘those incapable of paying back their debt
due to military service or a serious medical condition may not be required to do so.’”
5A prominent treatise also suggests that courts should be given broad discretion in making
a determination if a particular case presents special circumstances, explaining:
Such special circumstances could simply be a reduction in the debtor’s income below the
current monthly income figure, or additional expenses, such as the moving expenses, security
deposit, and other costs that would be incurred if the debtor moved to a lower rent apartment.
There are many other possibilities, such as high commuting costs, the increased price of gas,
security costs in dangerous neighborhoods or the cost of infant formula and diapers. Indeed any
legitimate expense that is out of the ordinary for an average family, or that may have increases
since the IRS guidelines were calculated, could be considered.
See 6 COLLIER ON BANKRUTPCY § 707.05[2][d] (15th ed. rev. 2007).
At this point, it is not entirely clear what courts, in general, will do with the special
circumstances exception. This paper will discuss a handful of recent cases that have dealt with
the special circumstances exception as it specifically relates to student loans.
C. Special Circumstances and Student Loans
1. Student Loans and Rebutting the Presumption of Abuse
In a number of cases, debtors have argued that educational loans obligations are “special
circumstances” for which there is no reasonable alternative but to raise a debtor’s expenses by a
sufficient amount to rebut the means test presumption. Trustees have responded to this argument
by claiming that educational loans do not fall within the ambit of the examples of special
circumstances provided in § 707(b)(2)(B). Trustees also contend that the debtor does have a
“reasonable alternative” in that the debtor can convert the case to Chapter 13, or can bring a
nondischargeability action pursuant to § 523(a)(8).
Courts considering the issue of whether a student loan obligation may constitute a
“special circumstance” have almost uniformly rejected the trustee’s arguments and have found
that such an obligation meets the statutory requirements for “special circumstance.” See In re
Haman, 366 B.R. 307 (Bankr. D. Dela. 2007); In re Knight, 370 B.R. 429 (Bankr. N.D. Ga.
2007); In re Martin, 371 B.R. 347 (Bankr. C.D. Ill. 2007); In re Delbecq, 368 B.R. 754 (Bankr.
S.D. Ind. 2007); In re Robinette, No. 7-06-10585 SA, 2007 WL 2955960 (Bankr. D.N.M. Oct. 2,
2007). These courts rejected the arguments made by trustees that the explicit examples included
6in § 707(b)(2)(B) were intended to define, qualify or otherwise limit the meaning of special
circumstances, concluding instead that the examples of special circumstances listed in §
707(b)(2)(B) are merely examples, and that special circumstances need not be of an involuntary
nature, and that they need not be outside the control of the debtor.
These courts also have found that the debtors had no reasonable alternative but to make
the student loan payments. For example, in In re Templeton, 365 B.R. 213 (Bankr. W.D. Okla.
2007), apparently the first published decision that addressed this specific issue, the court
concluded that the debtors had no reasonable alternative to making the student loan payments
because (1) the student loans were nondischargeable; (2) the loans were not eligible for
consolidation; and (3) the debtors were not eligible for deferment of the student loans. Under the
circumstances, there was “nothing within the Debtor’s power to reduce or otherwise avoid the
additional expense of the student loans.” Id. at 216. The court, therefore, denied the UST’s
motion to dismiss the petition, as the debtors had rebutted the presumption of abuse by showing
“special circumstances.” Id. at 217.
Several courts have addressed the trustee’s argument that a Chapter 13 filing is a
reasonable alternative for a debtor. The court in In re Martin, 371 B.R. 347 (Bankr. C.D. Ill.
2007) found that Chapter 13 was not a reasonable alternative for the debtors. The court
recognized that student loan debt is nondischargeable and that a Chapter 13 filing would result in
only partial payment of the student loan during the term of the plan, with a substantial balance
still being due on completion of the case. The court concluded that the student loan debt was “a
distinct, particular, additional, and extra factor which this Court should consider in determining
whether abuse exists here.” Id. at 356. See also In re Robinette, No. 7-06-10585 SA., 2007 WL
2955960 at *5 (Bankr. D.N.M. Oct. 2, 2007) (court, with little discussion, simply “agrees with
the cases that have found these [student loan] expenses to be special circumstances, because
there is no reasonable alternative to making the payments”).
Other courts, in finding that Chapter 13 does not provide a reasonable alternative, have
engaged in a more thorough discussion. In In re Delbecq, 368 B.R. 754 (Bankr. S.D. Ind. 2007),
the court first noted that, in its jurisdiction, debtors had historically been allowed to classify
separately student loan indebtedness pursuant to § 1322(b)(5). The court then reasoned:
If compelled to convert to Chapter 13, debtor’s plan would likely not provide a
distribution to her general unsecured creditors, but would instead provide only for the ongoing
7payment of her student loan. Moreover, given the administrative costs associated with Chapter
13, the payment on her student loan during the life of the plan would be less than what Debtor is
currently paying. It would seem, then, that the only parties who stand to benefit from conversion
are Debtor’s attorney and the Chapter 13 trustee. This result can hardly be what Congress
intended by the means test. Id. at 760-61.
The court in In reDelbecq court conceded that several other courts, in cases not involving
student loans, have rejected the argument that the inability to fund anything other than a “zero
percent” plan constitutes “special circumstances.” For example, in In re Castle, 362 B.R. 846
(Bankr. N.D. Ohio 2006), the debtors received $1000 per month in child support which was
included in “current monthly income” causing excess income under the means test, though
debtors would not be required to devote child support payments to a Chapter 13 plan. When
child support payments were deducted from the debtors’ “disposable income,” no income would
be available to pay unsecured creditors under a Chapter 13 plan. The debtors argued that it
would be “a colossal waste of time and money” to apply the presumption of substantial abuse
when, even if their case were to be converted to Chapter 13, the remuneration to unsecured
creditors, if any, would be negligible. Id. at 850. The court rejected the debtors’ argument,
finding that a de minimis payout to unsecured creditors does not constitute “special
circumstances.” The court in In re Castle reasoned:
Nothing in the Bankruptcy Code prohibits a debtor from submitting a Chapter 13 plan of
reorganization having little or no value to unsecured creditors so long as it meets the Code’s
other requirements—e.g., having been proposed in good faith, § 1325(a)(3), meeting the best
interest of creditors test of § 1325(a)(4). And while such plans are not favored, there exists a
logical disconnect that a “special circumstance” under the Bankruptcy Code could arise from a
situation which the Code otherwise permits. Id. at 851.
Similarly, in In re Johns, 342 B.R 626 (Bankr. E.D. Okla. 2006), the court recognized
that when child support payments and 401K loan payments and contributions were deducted
from the debtors’ disposable income, no income would be available to pay unsecured creditors
under their Chapter 13 plan. Nevertheless, the court, with little discussion, concluded that “[t]he
potential payback of zero percent to unsecured creditors in a Chapter 13 case is not a special
circumstance contemplated under § 707(b)(2)(B).” Id. at 629.
The court in In re Delbecq disagreed with the reasoning of those two courts, finding that:
8[T]here is simply no logic to essentially forcing a debtor into a Chapter 13 case if the
distribution in that case will yield nothing to unsecured creditors. In the Court’s opinion, the
administrative cost of Chapter 13 to the entire bankruptcy system alone makes such a result ill-
advised. It also is consistent with Congressional intent. 368 B.R. at 760.
Several courts have been critical of the notion that student loan debt may constitute
“special circumstances.” In In re Vaccariello, No. 07-41034, 2007 WL 2769453 (Bankr. N.D.
Ohio Aug. 22, 2007), the debtors acknowledged that, even after including payment of their
student loans, they still had disposable income that exceeded the presumptive abuse standard.
Under those circumstances, the presumption of abuse could not be rebutted. The court also
expressed its disagreement with those courts that had found that student loan debt might
constitute “special circumstances.” The court found no “unusual circumstances,” noting that the
debtors “incurred the student loan debt in the ordinary course of acquiring their educations and
without any special circumstances” and that “funding higher education through the use of student
loans is becoming ubiquitous.” Vaccariello, 2007 WL 2769453 at *6-*7. The court reasoned
that “[i]t cannot be argued that having a student loan is rare or unusual; therefore, Debtors’
obligation to repay their student loans, standing alone, cannot constitute special circumstances.
Vaccariello, 2007 WL 2769453 at *7.
The court in In re Lightsey, No. 06-40896, 2007 WL 2363025 (Bankr. S.D. Ga. July 26,
2007), also was critical of those courts that have utilized student loan payment obligations to
adjust a debtor’s expenses upward to reduce net income and avoid the means test threshold. In
that case, the debtor and her ex-husband took out a car loan. After their divorce, there was a
default on the loan and the car was repossessed and sold, leaving a deficiency. When the
creditor pursued the deficiency claim against the debtor, the debtor filed her Chapter 7 case. The
debtor had remarried, and in applying the means test, the amounts a non-debtor spouse regularly
contributes to a debtor’s household expenses are included in calculating the debtor’s current
monthly income. Debtor argued that “special circumstances” existed, as it would be inequitable
for her to have her case dismissed or be forced into filing a Chapter 13 case in which her current
husband would be forced to assist in paying a debt from a previous marriage on a car that she no
longer owned. The court rejected the debtor’s argument, even though the circumstances of the
case were “unfortunate and arguably unfair.” Lightsey, 2007 WL 2363025 at * 4.
9The court, in dicta, expressed concern that “[t]hose courts concluding that ‘special
circumstances’ include non-dischargeable student loan obligations arguably will have to apply
this standard to every other non-dischargeable obligation,” and stated that Chapter 13 repayment
“provides the ‘reasonable alternative’ to engaging in a strained reading of what constitutes a
special circumstance in order to adjust the income or expense calculations of the means test.”
Lightsey, 2007 WL 2363025 *5 fn. 3. The court conceded that debtors might be forced into a
Chapter 13 case which might yield the unsecured creditors no more than they would receive in
Chapter 7, but concluded that Congress had made a policy decision that debtors follow the
Chapter 13 path. The court reasoned that “there are indeed reasons why a low dividend Chapter
13 case may still provide a benefit that achieves the Congressional purpose. One of these is the
potential of modification during the life of the plan to increase the dividend to creditors.”
Lightsey, 2007 WL 2363025 *5 n.3 (citations omitted).
2. Student Loans and Calculating Projected Disposable Income
As discussed above, a debtor may show “special circumstances” in order to rebut the
presumption of abuse. In addition, several courts have determined that, by incorporating §
707(b)(2)(B) into § 1325(b)(3), the Bankruptcy Code also makes “special circumstances”
relevant in calculating the disposable income that a debtor may be required to devote to payment
of unsecured creditors under his Chapter 13 plan. See In re Knight, 370 B.R. 429 (Bankr. N.D.
Ga. 2007); In re Moore, 367 B.R. 721 (Bankr. D. Kan. 2007).
In In re Moore, the court first noted that under § 1325(b)(1), upon objection to the
confirmation of a plan, the plan must provide that all of debtor’s projected disposable income be
applied to make payments to unsecured creditors. The court then pointed out that § 1325(b)(2)
defines “disposable income” as current monthly income “less amounts reasonably necessary to
be expended “ and that when a debtor has above-median income, §1325(b)(3) states that
“amounts reasonably necessary to be expended under paragraph (2)” shall be determined under §
707(b)(2)(A) and (B). Id. at 726. The court concluded that § 1325(b)(3)’s incorporation of §
707(b)(2) provides the court with the ability to adjust current monthly income and expenses upon
the debtor demonstrating special circumstances that justify such an adjustment for which there is
no reasonable alternative. The court reasoned that a debtor’s special circumstances enable a
court to deviate “from the formulaic determination under § 1325(b)(3),” and that the
10incorporation of § 707(b)(2) imparts to the court “considerable discretion ‘to temper the
arbitrariness of the means test numbers.’” Id at 726 (citing 6 COLLIER ON BANKRUTPCY §
707.05[2][d] at 707-51 (15th ed. rev. 2007)).
In In re Knight, 370 B.R. 429 (Bankr. N.D. Ga. 2007), the debtor’s projected monthly
disposable income, without taking into account his student loans, was $855. The Chapter 13
plan provided for the debtor to make regular contractual payments of $455 per month on his
student loans and $400 per month for pro rata distribution to other unsecured creditors. The
trustee argued that all debtor’s projected disposable income needed to be paid on a pro rata basis
to all unsecured creditors. The court rejected this argument, noting that § 1325(b)(5) expressly
authorizes the separate classification and different treatment of long-term unsecured debt, and
that the increase in the amounts that all unsecured creditors would receive over sixty months if
the plan treated all unsecured creditors the same way would be de minimis. Therefore, unfair
discrimination was not an issue. Id. at 432-33. The court went on to note, though, that even if all
debtor’s disposable income had to be paid ratably to all unsecured creditors, “special
circumstances” might justify a downward adjustment of disposable income by the amount of the
student loan payments. Id. at 433
The court, like the court in In re Moore, decided that § 1325(b)(3)’s incorporation of §
707(b)(2) means that a Chapter 13 debtor may show special circumstances to adjust disposable
income to the same extent and in the same manner as a Chapter 7 debtor may show them to rebut
the presumption of abuse. The court explained:
The Court rejects the proposition that § 707(b)(2)(B) operates only as a procedural
mechanism to permit a debtor to rebut a presumption of abuse. Because a chapter 13 debtor has
no occasion to rebut the presumption, which does not operate in a chapter 13 case, such an
interpretation would take § 707(b)(2)(B) out of the disposable income determination, contrary to
its express inclusion by § 1325(b)(3). It is counterintuitive to think that a debtor could avail
herself of rebutting the presumption of abuse by showing a special circumstance expenditure to
be qualified for relief in a chapter 7 case, but not have the opportunity to present the same
circumstances to obtain chapter 13 relief. Id. at 436.
The court recognized the difficult situation that a debtor with student loan obligations
may face:
11There is no dispute that, based on his income, the operation of the means test of
§ 707(b)(2) would trigger a presumption of abuse (even if the student loan payments could be
deducted under § 707(b)(2)(B) due to special circumstances) that could preclude chapter 7 relief.
If the Debtor’s plan must commit $ 854.46 per month to unsecured creditors to be confirmable,
he will not have enough money to continue regular payments on his student loans. So he would
be between a rock and a hard place. His only two alternatives would be proceeding with such a
chapter 13 plan or not pursuing bankruptcy relief. In the former situation, he would have to deal
with the consequences of default on his student loan upon completion of plan payments in five
years. In the latter situation, he could either continue making payments on his student loans but
would have no way of dealing with other creditors, or he could pay other creditors, resulting in
student loan defaults. None of these is a reasonable alternative to continuation of his regular
student loan payments. Id. at 439-40.
Agreeing with those courts that have found that student loan obligations may constitute
special circumstances, the court concluded that “the existence of long-term, nondischargeable
student loans may constitute a ‘special circumstance’ requiring the continuation of regular
payments as expenditures for which there is no reasonable alternative within the meaning of §
707(b)(2)(B).” id at 440.
III. DISCHARGE OF STUDENT LOANS AND UNDUE HARDSHIP
A. Discharge Exception for Educational Loans
Educational loans traditionally were treated like any other form of unsecured debt in
bankruptcy and were generally dischargeable. See Education Amendments of 1976, Pub. L. No.
94-482, § 439A, 90 Stat. 2081, 2141 (1976). As federal loan spending continued to grow,
however, concerns developed over the possibility of student abuse of the federal loan programs.
There was concern that students, who had received benefits from their educational loans in the
form of enhanced earning potential, would file for bankruptcy soon after graduation and thus
jeopardize the integrity of the student loan program. See Hornsby v. Tenn. Student Assistance
Corp. (In re Hornsby), 144 F.3d 433, 436-37 (6th Cir. 1998) (“The dischargeability provision at
issue, § 528(a)(8), was enacted to prevent indebted college or graduate students from filing for
bankruptcy immediately upon graduation, thereby absolving themselves of the obligation to
12repay their student loans.”) Beginning in 1976, and through a series of amendments, Congress
has made it increasingly more difficult to obtain a discharge of an educational loan obligation.
Section 523(a)(8) of the Bankruptcy Code currently restricts the dischargeability of
educational benefits or loans that were insured or guaranteed by a governmental unit or nonprofit
institution. In addition, as a result of BAPCPA, the discharge of any educational loan that is a
qualified education loan (as defined in section 221(d)(1) of the IRC of 1986) is similarly
restricted. BAPCPA thus extended the nondischargeability of educational loans to many loans
that are not insured or guaranteed by a governmental unit or under a program funded by a
governmental unit or nonprofit institution. Most student loans are now nondischargeable.
B. Discharge Based on “Undue Hardship”
There is an exception, though, to the general nondischargeability of student loan debt.
Section 523(a)(8) allows a court to discharge an otherwise nondischargeable student loan if
excepting a discharge “would impose an undue hardship on the debtor and the debtor’s
dependents.” Unfortunately, “undue hardship” is not defined in the Bankruptcy Code, and while
the legislative history demonstrates that Congress was concerned about abusive student debtors
and protecting the solvency of student loan programs, it does not shed light on what Congress
meant by use of the term “undue hardship.” See Andresen v. Neb. Student Loan Program, Inc.
(In re Andresen), 232 B.R. 127, 137 (B.A.P. 8th Cir. 1999), overruled on other grounds by Long
v. Educ. Credit Mgmt. Corp. (In re Long), 332 F.3d 549 (8th Cir. 1999); see generally, Veryl
Miles, Fairness, Responsibility, and Efficiency in the Bankruptcy Discharge: Are the
Commission’s Recommendations Enough? 102 Dick. L. Rev. 795, 824-830 (1998). Courts have
had to struggle with the meaning of “undue hardship,” and while there is a somewhat divergent
body of appellate authority, two primary tests have evolved. Whatever the test applied, though,
debtors have generally had a difficult time establishing sufficient “undue hardship” to justify the
discharge of student loan debt.
1. Totality of the Circumstances Test
The “totality of the circumstances” test for student loan discharge has been adopted by
the United States Circuit Court of Appeals for the Eighth Circuit. See Lee v. Regions State
Student Loans (In re Lee), 352 B.R. 91, 95 (B.A.P. 8th Cir. 2006); In re Collins, 2007 WL
132828872 at *3 (Bankr. D. Minn. Oct. 2, 2007). In addition, this test continues to be applied by
some courts in the First Circuit, as the First Circuit has yet to settle upon the “totality of the
circumstances test” or the “Brunner test” (discussed below). See In re Smith, 328 B.R. 605, 611
(B.A.P. 1st Cir. 2005) (refusing to choose between the Brunner test and the totality of the
circumstances test because the debtor could not possibly meet either test); Kopf v. Dep’t of
Educ., (In re Kopf), 245 B.R. 731, 742 (Bankr. D. Me. 2000) (applying the totality of the
circumstances test); Phelps v. Sallie Mae Loan Serv. Ctr, (In re Phelps), 237 B.R. 527, 535
(Bankr. D.R.I. 1999) (applying the totality of the circumstances test).
In Long v. Educ. Credit Mgmt Corp., (In re Long), 332 F.3d 549, 554-55, (8th Cir. 2003),
remanded to 292 B.R. 635 (B.A.P. 8th Cir 2003) (no undue hardship found on remand), the court
explained the “totality of the circumstances test” as follows:
In evaluating the totality-of-the-circumstances, our bankruptcy reviewing courts should
consider: (1) the debtor’s past, present, and reasonably reliable future financial resources; (2) a
calculation of the debtor’s and her dependent’s reasonable necessary living expenses; and (3) any
other relevant facts and circumstances surrounding each bankruptcy case [citation omitted].
Simply put, if the debtor’s reasonable future financial resources will sufficiently cover payment
of the student loan debt-while still allowing for a minimal standard of living-then the debt should
not be discharged. Certainly, this determination will require a special consideration of the
debtor’s present employment and financial situation-including assets, expenses, and earnings-
along with the prospect of future changes-positive or adverse-in the debtor’s financial position
[citation omitted].
In addition to the presence of excess income over expenses, this test has allowed
bankruptcy courts to consider various other factors, such as the physical and mental health of the
debtor, and the debtor’s good faith or bad faith effort to repay the debt. See generally Terrence
Michael & Janie Phelps, “Judges?! – We Don’t Need No Stinking Judges!!!:” The Discharge of
Student Loans In Bankruptcy Cases And The Income Contingent Repayment Plan 38 Tex. Tech
Law Rev. 73, 84 (2005). Several courts applying the totality of the circumstances test have
relied on a list of factors, such as the following list set out by the court in In re Morris, 277 B.R.
910, 914 (Bankr. W.D. Ark. 2002):
(1) Total incapacity now and in the future to pay one’s debts for reasons not within
the control of the debtor.
14(2) Whether the debtor has made a good faith effort to negotiate a deferment or
forbearance of payment.
(3) Whether the hardship will be long-term.
(4) Whether the debtor has made payments on the student loan.
(5) Whether there is a permanent or long term disability of the debtor.
(6) The ability of the debtor to obtain gainful employment in the area of study.
(7) Whether the debtor has made a good faith effort to maximize income and
minimize expenses.
(8) Whether the dominant purpose of the bankruptcy petition was to discharge the
student loans.
(9) The ratio of the student loan to total indebtedness.
2. The Brunner Test
The most widely used test for evaluating the dischargeablilty of a student loan under §
523(a)(8) is often called the Brunner test, named for the case in which it originated. See Brunner
v. N.Y. State Higher Educ.Servs. Corp., 831 F.2d 395, 396 (2d Cir. 1987). Under this test, the
debt is dischargeable if three conditions are met:
(1) 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) 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) the debtor has made good faith efforts to repay the loan.
The Brunner test has been adopted in all but the Eighth and First Circuits. See, e.g., Oyler
v. Educ. Credit Mgmt. Corp. (In re Oyler), 397 F.3d 382, 385 (6th Cir. 2005); U.S. Dep’t of
Educ.v. Gerhardt (In re Gerhardt), 348 F.3d 89, 91 (5th Cir. 2003); Hemar Ins. Corp. v. Cox (In
re Cox), 338 F.3d 1238, 1241 (11th Cir. 2003); United Student Aid Funds, Inc. v. Pena (In re
Pena), 155 F.3d 1108, 1112 (9th Cir. 1998).
The first prong of the Brunner test requires a court to consider the debtor’s income, living
expenses and standard of living. Of course, a party that in fact lives below the poverty line has
“an inability to maintain a minimal standard of living” and so satisfies the first prong of the
Brunner test. See No. 06-10349, In re Mosley, No. 06-10349, 2007 WL 2263097 at *3 (11th Cir.
15Aug. 9, 2007); In re Bryant, 72 B.R. 913, 916 (Bankr. E.D. Pa. 1987). But, while a debtor may
be expected to make some major personal and financial sacrifices, it is not necessary for a debtor
to be living below the federal poverty guideline in order to meet the undue hardship standard,
See Pa. Higher Educ. Assistance Agency v. Faish, (In re Faish), 72 F.3d 298, 305 (3d Cir. 1995)
(the Code does not require that the debtor “live in abject poverty . . . before a student loan may
be discharged”); Salinas v. United Student Aid Funds, Inc. (In re Salinas), 258 B.R. 913, 918
(Bankr. W.D. Wis. 2001) (“The simple fact is that § 523(a)(8) does not mandate that the debtors
fall below governmental poverty guidelines before their debts can be discharged.”); In re Correll,
105 B.R. 302, 306 (Bankr. W.D. Pa. 1989) (“We do not believe . . . that Congress intended a
fresh start under the Bankruptcy Code to mean that families must live at poverty level in order to
repay educational loans.”). The court must determine the amount “minimally necessary” to
ensure that the debtor’s needs for care, including food, shelter, clothing, and medical treatment
are met. See Rice v. U.S. (In re Rice), 78 F.3d 1144, 1149 (6th Cir. 1996). As explained by the
court in Stein v. Bank of New England, N.A. (In re Stein), 218 B.R. 281, 287 (Bankr. D. Conn.
1998), [d]istilled to its essence, this test requires the Court to examine the debtor’s current
monthly income and expenses and determine a flexible minimal standard of living sensitive to
the particular circumstances of each case through the application of common sense.
Several courts have considered whether it is appropriate to consider the Internal Revenue
Service Collection Financial Standards (hereinafter the “IRS Standards”) in determining what is
necessary to maintain a minimal standard of living. The IRS Standards are used in determining
the rate at which delinquent taxes must be paid to the IRS under installment agreements, as well
as the amount of delinquent taxes that will be written off in connection with determining whether
to accept a taxpayer’s offer in compromise. See 26 U.S.C. § 7122. These standards were
developed to ensure that a taxpayer would have “adequate means to provide for basic living
expenses.” See 26 U.S.C. § 7122(c)(2)(A).
Some bankruptcy courts have considered IRS Standards in evaluating a debtor’s
expenses. See, e.g., In re Cota, 298 B.R. 408, 415 (Bankr. D. Ariz. 2003); In re Ivory, 269 B.R.
890, 906 (Bankr. N.D. Ala. 2001). The Bankruptcy Appellate Panel in Educ. Credit Mgmt Corp.
v. Howe, (In re Howe), 319 B.R. 886, 892-93 (B.A.P. 9th Cir. 2005) agreed that a bankruptcy
court may consider the IRS Standards as “one piece of evidence” in determining if the debtor can
maintain a minimal standard of living for herself and her dependents if forced to repay the
16student loans (the first prong of the Brunner test), but noted that the court “should not use the
IRS Standards as the sole measure of what is necessary to maintain a minimal standard of
living.” The court found that the IRS Standards might lead to an erroneous calculation in the §
523(a)(8) context for a number of reasons. For example, the living expense allowance under the
IRS Standards increased not only with a debtor’s family size, but also with his or her income.
All other factors being equal, the court believed that the amount necessary to maintain a minimal
standard of living under § 523(a)(8) should not be adjusted upward simply because one debtor
has a higher income than another. Id. at 893. In addition, the court pointed out that the amount
that a debtor actually spends will sometimes be less than the amount permitted under the IRS
Standards. The court reasoned that “[a]llowing a debtor more than he or she actually spends is
inconsistent with the requirements of economy and sacrifice necessary to obtain discharge of
student loan debt under § 523(a)(8).” Id. at 893. The court also noted that the IRS Standards do
not allow for certain expenses that courts have sometimes recognized as necessary to the
maintenance of a minimal standard of living in § 523(a)(8) cases (such as the purchase of a new
car with a long repayment period). Id. at 893. The Bankruptcy Appellate Panel, therefore,
concluded that the bankruptcy court had erred “in simply adopting the IRS Standards instead of
conducting an individualized analysis into whether debtor’s actual expenses are necessary to the
maintenance of a minimal standard of living.” Id. at 894.
The bankruptcy court in Albee v. U.S. Dep’t of Educ. (In re Albee), 338 B.R. 407 (Bankr.
W.D. Mo. 2006), rejected the argument that, in determining debtor’s reasonable living expenses,
Congress intended that it should be bound by the amounts shown in the IRS Standards applicable
to the debtor. The court explained:
First, it is not clear to the Court that Congress intended that the courts be bound by those
standards in assessing whether repayment of student loan debt would constitute an undue
hardship. Congress had the opportunity to indicate that if that was its intent in making
amendments to the Bankruptcy Code embodied in the Act. For example, in amended § 707(b)
Congress specifically mandated that the courts utilize the IRS National Standards, Local
Standards and standards for Other Necessary Expenses to determine a debtor’s appropriate
expenses in assessing whether the debtor has sufficient disposable income that the filing of a
Chapter 7 proceeding would constitute an abuse. 11 U.S.C. § 707(b)(2)(A)(ii). In addition,
Congress mandated that those same standards be utilized in assessing the disposable income of
17Chapter 13 debtors whose income is above the applicable median. 11 U.S.C. § 1325(b)(3). The
Act also includes an amendment to paragraph (8) of § 523(a), the governing provision here,
which expands the types of indebtedness subject to the requirement that discharge may only be
obtained upon a showing of undue hardship. 11 U.S.C. § 523(a)(8)(B). Therefore, while
Congress specifically required the courts to utilize IRS standards in certain places and did make
amendments to § 523(a)(8), it did not purport to require the courts to be bound by those
standards in making the undue hardship determination. Accordingly, the Court does not consider
itself bound by such standards in this context. Id. at 412.
The second prong of the Brunner test, sometimes referred to as “the additional
circumstances test,” requires that the debtor produce evidence that additional circumstances exist
that will prevent the debtor from maintaining a minimal standard of living for a significant
portion of the repayment period if obligated to repay student loans. The Bankruptcy Appellate
Panel of the Ninth Circuit in Nys v. Educ. Credit Mgmt Corp. (In. re Nys), 308 B.R. 436 (B.A.P.
9th Cir. 2004), rejected the reasoning of the bankruptcy court, which had found that the
“additional circumstances” of the second prong of the Brunner test needed to be “exceptional”
circumstances such as “serious illness, psychiatric problems, disability of a dependent, or
something which makes the debtor’s circumstances more compelling than those of an ordinary
person in debt.” Id. at 444. See also T I Federal Credit Union v. DelBonis, 72 F.3d 921, 927 (1st
Cir. 1995) (in dicta, stating that the undue hardship must be attributable to “truly exceptional
circumstances, such as an illness or the existence of an unusually large number of dependents.”)
Instead, the Bankruptcy Appellate Panel concluded that;
The circumstances need be “exceptional” only in the sense that they demonstrate
insurmountable barriers to the debtor’s financial recovery and ability to pay. The court may
consider any number of circumstances that relate to the future ability to pay. Depending on the
case, the debtor’s age, training, physical and mental health, education, assets, ability to obtain a
higher paying job or reduce expenses, and other factors not listed here may be relevant. The test
is, by its nature, case-by-case. Id. at 444.
Based on prior case law from around the country, the court then set out the following
nonexhaustive list of factors that courts should consider in determining if “additional
circumstances” exist:
181. Serious mental or physical disability of the debtor or the debtor’s dependents
which prevents employment or advancement;
2. The debtor’s obligations to care for dependents;
3. Lack of, or severely limited education;
4. Poor quality of education;
5. Lack of usable or marketable job skills;
6. Underemployment;
7. Maximized income potential in the chosen educational field, and no other more
lucrative job skills;
8. Limited number of years remaining in work life to allow payment of the loan;
9. Age or other factors that prevent retraining or relocation as a means for payment
of the loan;
10. Lack of assets, whether or not exempt, which could be used to pay the loan;
11. Potentially increasing expenses that outweigh any potential appreciation in the
value of the debtor’s assets and/or likely increases in the debtor’s income;
12. Lack of better financial options elsewhere. Id. at 446-47.
The third prong of the Brunner test requires that the debtor show that he or she made
good faith efforts to repay the loans. The good faith inquiry is guided by the precept that “undue
hardship encompasses a notion that the debtor may not willfully or negligently cause his own
default, but rather his condition must result from factors beyond his reasonable control.” See Pa.
Higher Educ. Assistance Agency v. Faish (In re Faish), 72 F.3d 298, 305 (3d Cir. 1995); In re
Roberson, 999 F.2d 1132, 1136 (7th Cir. 1993). The failure to make a payment, standing alone,
does not establish a lack of good faith. See Educ. Credit Mgmt. Corp. v. Polleys, 356 F.3d 1302,
1311 (10th Cir. 2004). If a court determines that the debtor has not made payments on the loans
because, through no fault of the debtor, he or she has never had the ability to pay, the good faith
effort test is met. See, e.g., Clevenger v. Neb. Student Loan Program (In re Clevenger), 212 B.R.
139, 146 (Bankr. W.D. Mo. 1997) (“If a debtor first demonstrates that she cannot maintain a
minimal standard of living without making any payments on her student loans, a history of
repayment is not required to demonstrate good faith.”). As the court noted in Maulin v. Sallie
Mae (In re Maulin), 190 B.R. 153, 156 (Bankr. W.D.N.Y. 1995), “[g]ood faith is a moving target
that must be tested in light of the particular circumstances of the party under review.” Various
19factors are considered by the courts, with courts primarily focusing on whether the debtor has
made a realistic effort to maximize income and minimize expenses. See, e.g., In re Roberson,
999 F.2d 1132, 1136 (7th Cir. 1993) (“With the receipt of a government-guaranteed education,
the student assumes an obligation to make a good faith effort to repay those loans, as measured
by his efforts to obtain employment, maximize income, and minimize expenses.”); Clark v. U.S.
Dept. of Educ. (In re Clark), 341 B.R. 238, 255 (Bankr. N.D. Ill. 2006) (A debtor’s good faith to
repay a student loan is measured by her efforts to “obtain employment, maximize income, and
minimize expenses.”); Elmore v. Mass. Higher Educ. Assistance Corp. (In re Elmore), 230 B.R.
22, 27 (Bankr. D. Conn. 1999) (Upon receiving the taxpayer-supported loan and consequent
educational benefit, a debtor assumes an obligation to make a good faith attempt at full
repayment as “measured by his or her efforts to obtain employment, maximize income and
minimize expenses.”)
In Flores v. U.S. Dept. of Educ. (In re Flores), 282 B.R. 847, 856 (Bankr. N.D. Ohio
2002), the court set out a list of factors which, though not necessarily complete, it believed
should be considered by a court in determining whether a debtor acted in good faith:
(1) whether a debtor’s failure to repay a student loan obligation is truly from factors
beyond the debtor’s reasonable control;
(2) whether the debtor realistically used all his available financial resources to pay the
debt;
(3) whether the debtor is using his best efforts to maximize their financial potential;
(4) the length of time after the student loan first becomes due that the debtor seeks to
discharge the debt;
(5) the percentage of the student loan debt in relation to the debtor’s total
indebtedness;
(6) whether the debtor obtained any tangible benefit(s) from his student loan
obligation.
3. Need for Expert Testimony?
Physical or psychological disabilities often form the basis of an undue hardship analysis,
whether under the “totality of the circumstances” test or the Brunner test. The bankruptcy courts
have taken diverse approaches on the type of evidence a debtor must present to support such
20claims. See Mosley v. General Revenue Corp. (In re Mosley), 330 B.R. 832 (Bankr. N.D. Ga.
2005), aff’d, 2007 WL 2263097 (11th Cir. 2007) (Judge Mullis provides an excellent discussion
of this issue and the various approaches taken by the courts). Courts generally have found that
the bare allegations of the debtor are not sufficient, and that whenever a debtor’s mental or
physical health is put in issue, some corroborating evidence must be produced. See, e.g., Pobiner
v. Educ. Credit Mgmt. Corp. (In re Pobiner), 309 B.R. 405, 419 (Bankr. E.D.N.Y. 2004);
Swinney v. Academic Financial Services (In re Swinney), 266 B.R. 800, 805 (Bankr. N.D. Ohio
2001). Some bankruptcy courts have determined that medical records that substantiate the
debtor’s testimony may be sufficient corroborating evidence, even without expert testimony. See,
e.g., Hoskins v. Educ. Credit Mgmt. Corp. (In re Hoskins), 292 B.R. 883, 887-88 (Bankr. C.D.
Ill. 2003) (“While expert testimony is not necessarily required to demonstrate a debtor’s medical
condition, bare allegations will not suffice. . . . A debtor’s testimony must be supported by some
corroborating evidence. Medical records which substantiate the debtor’s testimony may be
sufficient.”); Brown v.Educ. Credit Mgmt. Corp. (In re Brown), 247 B.R. 228, 234 (Bankr. S.D.
Ohio 2000) (medical documentation sufficient without expert medical testimony).
Other courts, though, have stressed the importance of expert testimony. See, e.g., Kelsey
v. Great Lakes Higher Educ. Corp. (In re Kelsey), 287 B.R. 132, 143 (Bankr. D. Vt. 2001)
(“Moreover, this Court closely scrutinizes claims for undue hardship based upon psychological
or emotional disability due to the susceptibility of such claims to fabrication, exaggeration and
fraud. Well qualified and substantiated expert testimony is essential.”) The danger of relying
solely on medical records and the debtor’s testimony is illustrated by Burkhead v. U.S. (In re
Burkhead), 304 B.R. 560 (Bankr. D. Mass. 2004). In that case, the debtor submitted medical
records from numerous doctors and medical professionals and a 24-page summary of her
medical history, in which she included a detailed recitation of all her surgical procedures,
diagnostic tests, physician appointments, and physical therapy and pain clinics sessions. She
also included in her medical history the pain levels she experiences, her symptoms, and
medications. While the court recognized her health problems, it concluded that the medical
records revealed that the debtor’s symptoms were amenable to treatment and control. While
acknowledging that the debtor testified about the seriousness of her medical condition, the court
pointed out that the debtor “did not call any expert witness to testify about her long-term
prognosis.” Id. at 565. The court denied the debtor’s request for a hardship discharge.
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