it please the court my name the skirt is on here from educational credit management corporation i like to reserve eight minutes for about all that's possible the issue before the court today is whether it will reaffirm the decision it made eight years ago and p is judge hayes right recognized adopt a new standard actually it's not really a new standard but rather an old standard with a new name or maybe an old standard without its true name the cheeseman can't pay now can't pay in the future standard that was adopted by the bankruptcy court and pena has been put forth again by the same bankruptcy judge and the same reasons the cheeseman that she was rejected eight years bruner these other courts have recognized the importance of a uniform national standards of undue hardship and protecting financial integrity of the student loan system as these courts have adopted the protest not all of them provide a great deal that's when a nation of why they've done it our some courts do in the most recent court to discuss the bringer test of the fourth circuit in the case and i apologize for the long quote but i really can't say it any better myself quote nonetheless the ordinary meaning of undue gives us clear guidance undue generally means unwarranted or excessive because congress selected the word undo the required hardship under section five twenty three eight must be more than the usual hardship that accompanies bankruptcy inability to pay one's debts by itself cannot be sufficient otherwise all bankruptcy laid against would have undue hardship the exception with fall the rule and congress restriction would be meaningless as a result and this is of course citing this course for pheno decision the court states the existence of the object of undue or agitate of undue indicates that congress viewed garden variety hardship as exceptional circumstances such as knuckle impairment and they say no no no that not it's not exceptional any circumstance that the debtor can show that would prevent the debtor from making bankruptcy courts about how the un do standard and the burner under our tests you know our dr bruner should be a fun and in the back attempted to set out some guidelines for the for the bankruptcy courts and they did and i thought they did the payment period they simply say that the inability to pay which is the first prong is going to continue they take out that additional circumstance language and that language is lifted directly from gruner and has been cited over and over again by all the other financial situation is the additional circumstance if that's the case as the court pointed out then all debtors and bankruptcy would be entitled to undue hardship discharge and i'll debtors are fifty one hundred fifty two years old maxed out in their career which that you know this is what they're going additional circumstance that means that every debtor who goes into bankruptcy who's eighty can have their student loans discharge and that's not where congress is going to be a big problem if absolutely your honor and that's the thing is when you look at this test and when you look at what it was started hurling well it is maybe a little bit higher than what i've seen but what you're seeing a lot these days and if you look at for example the stanley stanley case men dollar all these other cases you're seeing a lot more debtors who are in their forty's fifty's and sixty's and what they're saying is i can't pay back my student loans and that's not unexpected i mean bankruptcy is for the honest but unfortunate death or it's not unfortunate if you create your own situation the person who was walking  the street and falls into a pothole that's unfortunate the person who spends years digging a hole and then jumps into it that's not an unfortunate circumstance and the borrowers by taking out loans if you are a if you are a thirty seven year old daughter who takes out a bunch of student loans maybe get a master's degree in social work and then you're done with your degree in your late forty's and then you don't pay on your loans for nine or ten years so the loan balance that was less than thirty thousand dollars is now eighty five thousand dollars and also you're now fifty one years old that debt are entirely created their own circumstances and one  rare circumstance and that is in fact exactly what the four circuit recognize when it stated it at the heart of the protest is the second prong it clearly reflects the congressional imperative that the debtors hardship must be more than  must be more than the normal hardship that accompanies any bankruptcy and then goes on to state that mr time doesn't really focus on on the hopelessness of the situation the  debtors unlikeliness of ever being in a position to repave what it's not just the hopelessness but it's also the reason for the hopelessness if you look at gruner one of the key elements that they took out from congressional the congressional history on this is that the debtors inability to pay must be for circumstances beyond their control but what do we do with knives i mean she's basically  at the top of her profession and drafter in relatively rural county in northern california where forty thousand dollars a year according to bankruptcy judge good money but she's never going to make a whole lot more than what they can afford to pay bribes people absolutely and that's the one problem i think with just looking at the under hardship in isolation and i think you have to look at the entire program that the student loan program really can't be viewed as just a loan problem it's really more of a social program and when you look at the terms that that congress created for this program it's clearly meant to promote education a debtor of any age can get any education that they choose and despite the fact that that's unsecured and there's no respect for credit worthiness in fact student loans are generally given to the you know to people who have a need so honor is because they're sorry if you look at all the programs at the end of the day this litigation is not about repayment this litigation is about this charge of belittling otherwise dictate what she will have to pay aspects of the program allow the student to make their choices and in the kind of dictate the terms of repayment how long they're going to pay to pay based on what they owe are now to based on percentage of their income and nice case if this court reaffirms the bankruptcy court administratively garnished at ten percent of her disposable paper so at the end of the day the issue for this court is is it unfair unjust to make her pay ten percent of her disposable pay i don't think it is because her situation fact i think that's overly generous considering that she's in the situation that she is today because of all of her voluntary choices when asked have you looked for another job just  anything about your lifestyle but you can't use the choices that you make in your lifestyle to justify a discharge of your student loans in nice case she should be required to pay ten percent of her disposal pay for her meaning working life then when she retires and irish chooses inaccurate that the court only look at the statute the state the higher the wind before programs defined by statute or regulation her statements are absolutely ponderous either she called the most incompetent customer service person that ever worked for william b for or she was i couldn't say it was just completely mistaken but there is there is no origination fee when you consult your student loans in fact your student loan balance goes down because in a default borrower question cost mandated well one of the big things that the court says that it that you don't have to be anything more than the ordinary debtor in bankruptcy and in fact that's exactly what this court said the opposite of been revealed and the court again when talking thousand dollars a month no reason to think it's bad times there's no market for what he can do at the moment but why do you say that for the rest of his life it's going to be clear he's not going to be able to earn more beyond the reasonable control otherwise any debt or most there's a bankruptcy all these are there because they made several bad choices and for the most part the toad doesn't really question the bad choices they've made but it's clear that congress when it comes to student loans severely questions the that is there's going to be some profound implications first the undue hardship standard is meant to protect the financial tiger the student loan system obviously any weakening of that standard weakens the integrity of the system further as fourth circuit noted fruits are applying a looser standard courts wouldn't ever be reached inconsistent results across bankruptcy cases someone recipients would obtain discharge while others in similar circumstances would unfairly remain obligated a looser standard would also cynicism that would infest the system if a disparate standard for destructive loans were to develop leaving some students entering the hearts of making loan payments while others are freed of their commitment on a floating standard and finally i think to do that would also be at odds with the very purpose of the bankruptcy laws recently the supreme court in central virginia community college the cats discuss the history of bankruptcy law and it's actually kind of fascinating discussion of bankruptcy law how far it goes back but one of the things they pointed out was the purpose of national bankruptcy law was to avoid the difficulties and injustice of a patchwork of differing state laws according the decision it gives and the court stated bankruptcy laws must be uniform throughout the united states adopting a new lower standard for the new hardship will create the difficulties and injustices that the bankruptcy law was meant to avoid thank you vatican does is it follows exactly the in re pena test but does a very good job of explaining how to apply that test with respect to the additional circumstances element and it in no way it is a lower standard is no way a departure from prior law the claim by appellant that that the trial judge in pena who was on the back panel in nice as being new law as being a change in law when in fact it's not where the change in law occurred in this case was at the bankruptcy court trial level the bankruptcy court expressly found that the debtor was unable to presently pay the student loan debt and then the court stated that that inability quote will almost certainly persist for the foreseeable future in that was in its written memorandum in its oral findings recorded stated that the inability to pay was quote likely to persist for the rest of the debtors employ of all life and the findings of the bankruptcy judge were were a recognition that there were additional circumstances showing that not only could the debtor not pay now but that she couldn't pay for a significant portion of the repayment peri where the bankruptcy court judge erred in this is what the back panel found in this isn't changing the law this is this is just being consistent with painted cases where the bankruptcy court erred was saying that the focus of the additional surface test should not be on whether the debt will ever be repaid but rather the focus should be on whether the debtor is deserving of a discharge and and in terms of deciding whether the debtor is deserving of a discharge the bankruptcy court wanted to focus on whether the debtor had a medical problem had a psychiatric disability or whether the debtor somehow was more deserving of a discharge than an ordinary person in debt and that is not the standard of pena that the focus as the as the back panel held in nice the focus of the painted test is is on whether the inability to pay is likely to persist for the forseeable future or for the significant por repayment period the the claim by appellant that just when you say that a court finds you can't pay now but they also find that you can't pay in the future that that's essentially makes all debtors eligible for  circumstance was likely to continue one hypothetical that i suggested that the vatican argument was if the let's say the debtor is a doctor works for a hospital the doc the hospital has to be torn down reconstructed the doctor is laid off for six months while the hospital's being weak constructed the doctor could show that because she's laid off or he's laid off she can't repay the debt now but that doesn't mean that in six months she wouldn't be able to repay the debt so there are two distinct elements to be say that you can't pay the debt now is not the same thing as saying like the test the bankruptcy court expressed throughout the trial and even in its written opinion and in prior opinions by the same bankruptcy court the in re patterson has recently expressed disagreement with with the way bru is applied but i would submit your honor your honors that congress is aware of how has been applied it's been on the books for for many many years in congress has amended the bankruptcy laws numerous times throughout that period as chosen not to change the student loan test they've left it alone the only they did make one change where they dropped a required the drop to a provision that gave an automatic discharge if the debt was more than more than seven years old that's been taken up but they haven't changed any of the rest of the discardable in all cases and they do that when they feel it's appropriate in in the case of student loans they chose not to change the law so it's not appropriate for the bankruptcy court judge to change the law on his own as he did in this case the nice opinion simply held that  the the focus of the test needs to be on exactly what pain he says whether there are additional circumstances that show the inability to pay it's likely persist for the perceivable future in this case nice or nice presented numerous additional circumstances she and this is a big distinction with the cases where we're just charges have been tonight she has maximized her income rather than rather than chosen not to maximize she she got her a lot of the debtors like in the brain case she the debtor in brain chooses to run a dance studio and even though she has a master's degree it could make more the case that whatever case the debtor chooses to be a pastor making less than ten thousand a year of a small church that although he has the ability to make much more than that and i think in most of the cases cited by the appellant where where the courts have held that second additional circumstances test weren't m second job she's she's lived in home a county for twenty years has family there which makes it unreasonable for her to try to move as the back panel pointed out even if she were to try to move she's already working for the state university  she probably only succeed in increasing her expenses for housing expenses quite low so if anything she would harm her ability to pay she says she's in effect showing good faith by telling the court i think i have the ability to pay back some of this debt and if and and she she stated she was willing to accept a partial discharge she said she could afford to pay some amount of money and she was willing to do that so but she still has met the criteria for a new hardship because she can't afford to repay the whole amount what the  a month she made numerous attempts to to negotiate a payment plan and then file for bankruptcy and in the bankruptcy court through a partial discharge an appropriate payment level could be set the the nice opinion doesn't say that she's per se going to get a discharge the discharge so and i think that that's really what the bankruptcy court job is is to to determine if she can afford to pay some of it how much it is i think the bankruptcy court if you look at all that the places in the  with the burner case it just quite frankly appeared to me that that it would prefer not to have to deal with these matters but the bath upin opinion is correct that this is the law of congress is the only one who can change this law  in any way change the law it's just as an extremely good job of clarifying how the additional circumstance test should be applied thank you thank you changed it but they don't need to if you look at if you read the bruner case in your read all the circuit level decisions that discussed gruner congress the spine it's made it clear that the courts have recognized how high this bar is and courts have said it means i mean if you want to sum it up in a nutshell that's what it means and it would be tough to find a decision with facts like the debtors were dead or got the discharge and there are no circuit level decisions that are as good as hers in should get any discharge at all because her situation was not beyond her control but the purpose of the under hardship exception you think she can control here she can't she can't find a higher drafting i suppose you decided when she was going to go to school she decided what she would go to school for she decided not to make any payments on her loans for nine years it's not understandable i mean any any better if i saw happen i mean that's this is wrong you're right what happens to weight than having to go back and have the loan reduced to a manageable amount which is probably going to be more than time because the fact the matter is there's really no certainty about what you can pay obviously any courts always speculating the one thing though is for certain is that you know under much of is meant to keep open the possibility of payment payments determined by the higher education act if you discharge any question of that debt then that will never be able to be collected and the fact is if you do a partial discharge and reduce it down to forty thousand dollars i doubt she'll ever pay it and so at the end of the day whether you reduce her balance down to ten or twenty she's still going to pay it will still be garnished at ten percent that's the end result the fact is student loans i'm like people's cars in the past maybe they ought to just wipe it out next t my understanding is that when actually congress passed the one before probably one thousand and four they considered a limiting the undue hardship standard but again i think if you look at the program as a whole instead of looking at this harsh result it's really good and saying we give you all these really