FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

In the Matter of: CATHY COLEMAN, 

Debtor.

No. 06-16477

EDUCATIONAL CREDIT MANAGEMENT D.C. No. CORPORATION,  CV-05-05231-SC Appellant,

OPINION

v.

CATHY COLEMAN,

Appellee. 

Appeal from the United States District Court

for the Northern District of California

Samuel Conti, District Judge, Presiding

Argued and Submitted

May 14, 2008—San Francisco, California

Filed March 25, 2009

Before: Diarmuid F. O’Scannlain and

Michael Daly Hawkins, Circuit Judges, and

James V. Selna,* District Judge.

Opinion by Judge Hawkins

*The Honorable James V. Selna, United States District Judge for the

Central District of California, sitting by designation. 

3771
COUNSEL

Curtis P. Zaun (argued) and Miriam Hiser (briefed), Educational Credit Management Corporation, St. Paul, Minnesota,

for the appellant. 

Lars T. Fuller (argued and briefed), The Fuller Law Firm, San

Jose, California, for the appellee.

OPINION

HAWKINS, Circuit Judge: 

We consider whether “undue hardship” determinations—

whereby bankruptcy courts decide whether student loans

3776 IN THE MATTER OF COLEMAN
qualify for discharge—are ripe in a Chapter 13 case substantially in advance of plan completion.

FACTUAL AND PROCEDURAL HISTORY

Cathy Coleman filed for bankruptcy under Chapter 13 in

2004, and the bankruptcy court confirmed a five-year repayment plan. Coleman owes over $100,000 in student loans to

Educational Credit. Since graduating from college, Coleman

has been irregularly employed as a substitute teacher and art

teacher, and was laid off in March of 2005. Just under a year

after the plan was confirmed, Coleman sought a determination

that it would constitute an undue hardship under 11 U.S.C.

§ 523(a)(8) for her to repay her student loans, and that her student loans should therefore not be excepted from discharge.

Educational Credit moved to dismiss for lack of subject matter jurisdiction on ripeness grounds. The bankruptcy court

denied the motion, In re Coleman, 333 B.R. 841 (Bankr. N.D.

Cal. 2005), the district court affirmed the decision of the

bankruptcy court, and Coleman appealed. After initially filing

an Opinion in that appeal, Educ. Credit Mgmt. Corp. v. Coleman (In re Coleman), 2008 U.S. App. LEXIS 16424 (9th Cir.

Aug. 1, 2008), this court noted that because the bankruptcy

court’s denial of Educational Credit’s motion to dismiss was

an interlocutory order, there was no appellate jurisdiction.

Consequently, we vacated the Opinion and remanded the case

to the district court in order to allow it to determine whether

to certify this issue for appeal under 28 U.S.C. § 1292(b).

Educ. Credit Mgmt. Corp. v. Coleman (In re Coleman), 539

F.3d 1168 (9th Cir. 2008). On remand, concluding that its

order involved a controlling question of law as to which there

is substantial ground for difference of opinion and that an

immediate appeal of the issue would materially advance the

termination of the litigation, the district court certified the

matter for interlocutory appeal pursuant to 28 U.S.C.

§ 1292(b). 

IN THE MATTER OF COLEMAN 3777
STANDARD OF REVIEW

We review the district court’s decision on an appeal from

a bankruptcy court de novo. In re Daily, 47 F.3d 365, 367 (9th

Cir. 1995) (per curiam); In re Siragusa, 27 F.3d 406, 407 (9th

Cir. 1994). “We apply the same standard of review to the

bankruptcy court [decision] as does the district court: findings

of fact are reviewed under the clearly erroneous standard, and

conclusions of law, de novo.” In re Tucson Estates, Inc., 912

F.2d 1162, 1166 (9th Cir. 1990). The issue of ripeness is a

question of law. Chang v. United States, 327 F.3d 911, 921

(9th Cir. 2003). 

STATUTORY BACKGROUND

[1] Debtors who seek Chapter 13 relief commit to a threeto five-year period of repayment, after which their remaining

debts are discharged.1 Unlike Chapter 7 debtors, who are entitled to a discharge of debt as soon as their estate is liquidated

and distributed,2 Chapter 13 debtors are not entitled to a discharge of debts unless and until they complete payments to

creditors under a three- to five-year plan.3 11 U.S.C.

1With the exception, of course, of those debts that are excepted from

discharge under 11 U.S.C. § 523. 

2

See 11 U.S.C. § 727. In Chapter 7, the debtor’s assets are liquidated

and distributed among creditors, and there is no repayment plan. Id. § 726.

3Unless the difficult standard of 11 U.S.C. § 1328(b) is met, a discharge

may be granted if the debtor fails to complete plan payments only if: 

(1) the debtor’s failure to complete such payments is due to

circumstances for which the debtor should not justly be held

accountable; 

(2) the value, as of the effective date of the plan, of property

actually distributed under the plan on account of each allowed

unsecured claim is not less than the amount that would have been

paid on such claim if the estate of the debtor had been liquidated

under chapter 7 of this title on such date; and 

(3) modification of the plan under section 1329 of this title

is not practicable. 

11 U.S.C. § 1328(b). 

3778 IN THE MATTER OF COLEMAN
§ 1328(a)(2).4

 Student loans are excepted from discharge

unless the debtor can show “undue hardship.” Id.

§§ 523(a)(8), 1328(a)(2).5 Coleman is currently making payments under her five-year Chapter 13 plan. She will not be

entitled to discharge any of her debts until she completes this

plan, and will not be entitled to discharge her student loans

unless she can show “undue hardship.” 

[2] To show undue hardship, the debtor must show “(1) that

she cannot maintain, based on current income and expenses,

a ‘minimal’ standard of living for herself and her dependents

if forced to repay the loans; (2) that additional circumstances

exist indicating that this state of affairs is likely to persist for

a significant portion of the repayment portion of the student

loans; and (3) that the debtor has made good faith efforts to

4Section 1328(a)(2) provides: 

(a) . . . [a]s soon as practicable after completion by the debtor

of all payments under the plan, . . . the court shall grant the debtor

a discharge of all debts provided for by the plan . . . except any

debt— 

. . . . 

(2) of the kind specified in section 507(a)(8)(C) or in

paragraph (1)(B), (1)(C), (2), (3), (4), (5), (8), or (9) of section 523(a). 

11 U.S.C. § 1328(a). 

5Section 523(a) provides in relevant part: 

(a) A discharge under section 727, 1141, 1228(a), 1228(b), or

1328(b) of this title does not discharge an individual debtor from

any debt— 

(1) for tax or a customs duty— 

. . . . 

(8) unless excepting such debt from discharge under this

paragraph would impose an undue hardship on the debtor

and the debtor’s dependents, for [qualified educational

loans]. 

11 U.S.C. § 523(a). 

IN THE MATTER OF COLEMAN 3779
repay the loans.” In re Saxman, 325 F.3d 1168, 1172 (9th Cir.

2003). 

The question before us is one of timing: may Coleman

obtain this undue hardship determination substantially in

advance of the time she completes payments under her Chapter 13 plan? 

[3] Federal Rule of Bankruptcy Procedure 4007(a) provides

that “A debtor or any creditor may file a complaint to obtain

a determination of the dischargeability of any debt.” Under

Federal Rule of Bankruptcy Procedure 4007(b), “[a] complaint other than under § 523(c)6

 may be filed at any time.”

7

Coleman argues that this Rule shows that the undue hardship

determination is ripe at any time, while Educational Credit

argues that, because Coleman cannot obtain a discharge

unless and until she completes payments under the plan, the

undue hardship determination is not ripe until at or near the

time Coleman completes plan payments. 

1. Constitutional Ripeness 

[4] Ripeness has two components: constitutional ripeness

and prudential ripeness.8 Thomas v. Anchorage Equal Rights

Comm’n, 220 F.3d 1134, 1138 (9th Cir. 2000) (en banc). “The

constitutional ripeness of a declaratory judgment action

depends upon ‘whether the facts alleged, under all the circum6Section 523(c) provides that debtors shall be discharged from debt

incurred from fraud or willful and malicious injury absent notice and a

hearing, which must be filed within 60 days after the first meeting of creditors pursuant to Federal Rule of Bankruptcy Procedure 4007(c). 

7These Bankruptcy Rules apply equally to debtors filing under Chapter

7 and debtors filing under Chapter 13. 

8Educational Credit states that it is challenging only the court’s jurisdiction and is not appealing the component of the bankruptcy court’s decision

that holds the court will not exercise its discretion to delay determination

of undue hardship until discharge is imminent; however, some of the

bankruptcy court’s analysis is relevant to our ripeness determination. 

3780 IN THE MATTER OF COLEMAN
stances, show that there is a substantial controversy, between

parties having adverse legal interests, of sufficient immediacy

and reality to warrant the issuance of a declaratory judgment.’ ” United States v. Braren, 338 F.3d 971, 975 (9th Cir.

2003) (quoting Md. Cas. Co. v. Pac. Coal & Oil Co., 312 U.S.

270, 273 (1941)); see also Hulteen v. AT&T Corp., 498 F.3d

1001, 1004 n.1 (9th Cir. 2007) (en banc) (finding jurisdiction

because “substantial controversy” requirement was met). 

[5] The issues presented must be “definite and concrete, not

hypothetical or abstract.” Thomas, 220 F.3d at 1139 (internal

quotation marks omitted). Where a dispute hangs on “future

contingencies that may or may not occur,” Clinton v. Acequia,

Inc., 94 F.3d 568, 572 (9th Cir. 1996), it may be too “impermissibly speculative” to present a justiciable controversy.

Portland Police Ass’n v. City of Portland, 658 F.2d 1272,

1273 (9th Cir. 1981). “The constitutional component of ripeness is a jurisdictional prerequisite.” United States v. Antelope, 395 F.3d 1128, 1132 (9th Cir. 2005).

[6] A “substantial controversy” arose between Coleman

and Educational Credit when Coleman filed for bankruptcy

protection under Chapter 13: Coleman’s purpose in filing was

to seek the discharge of her student loans, and Educational

Credit seeks to prevent this. Further, the controversy here is

certainly “definite and concrete, not hypothetical or abstract,”

9

because it is a controversy between Coleman and Educational

Credit over a specific and defined debt. 

[7] It is true that Coleman’s actual discharge of her student

loans will only occur, if at all, when she completes payments

under the plan. 11 U.S.C. § 1328(a)(2). If she does not complete her plan payments, there will be no discharge.10

9Thomas, 220 F.3d at 1139 (internal quotation marks omitted). 

10Unless, again, she can satisfy the difficult standard of § 1328(b). See

supra n.2. 

IN THE MATTER OF COLEMAN 3781
But plan completion is a single factual contingency — not

a “series of contingencies” rendering the decision “impermissibly speculative.” See Portland Police, 658 F.2d at 1273,

1274. In Yahoo! Inc. v. La Ligue Contre Le Racisme Et

L’Antisemitisme, 433 F.3d 1199, 1211 (9th Cir. 2006) (per

curiam), this court concluded that a challenge to the enforceability of a French court injunction was constitutionally ripe

even though enforcement of that injunction had yet to be

sought.11 If this factual contingency did not render the dispute

so “impermissibly speculative” that it failed to meet the “case

or controversy” requirement, it is difficult to see how the dispute between Coleman and Educational Credit would not also

qualify as constitutionally ripe. Just as Coleman could fail to

complete her plan payments, parties to the Yahoo! dispute at

the time ripeness was at issue could have decided not to seek

the enforcement of its injunction in the United States.12 The

dispute here is constitutionally ripe. 

2. Prudential Ripeness Test

The Supreme Court has held that “[p]roblems of prematurity and abstractness may well present ‘insuperable obstacles’

to the exercise of the Court’s jurisdiction, even though that

jurisdiction is technically present.” Socialist Labor Party v. Gilligan,

13 406 U.S. 583, 588 (1972) (citing Rescue Army v. Mun.

Court, 331 U.S. 549, 574 (1947)). 

11In Yahoo!, eight judges agreed that the issue was constitutionally ripe

for adjudication, although three of the eight judges concluded that the

issue was not prudentially ripe. Three judges voted to dismiss for lack of

personal jurisdiction. 433 F.3d at 1201. 

12In Clinton, the court declined to decide whether an agreement to liquidate existed because several years remained before the party would be

required to perform. 94 F.3d at 572. There, however, the parties agreed

that the issue was not ripe because it appeared likely that the company

would liquidate regardless of the decision. Id. Here, by contrast, there is

not a substantial likelihood that Coleman will be able to pay all of her student loans regardless of the outcome of the undue hardship decision. 

13Socialist Labor Party dealt with the constitutionality of Ohio’s election laws. 406 U.S. at 584. 

3782 IN THE MATTER OF COLEMAN
[8] The Supreme Court has developed a two-part test for

determining the prudential component of ripeness in the

administrative context: “the fitness of the issues for judicial

decision” and “the hardship to the parties of withholding court

consideration.” Abbott Labs. v. Gardner, 387 U.S. 136, 149

(1967), overruled on other grounds by Califano v. Sanders,

430 U.S. 99 (1977).14 Originally, we generally applied this

two-part test in making prudential ripeness determinations

without strictly limiting the test to the administrative law context. See, e.g., Nat’l Audubon Soc’y, Inc. v. Davis, 307 F.3d

835, 850 (9th Cir.), amended on denial of reh’g, 312 F.3d 416

(9th Cir. 2002); Knight v. Kenai Penninsula Borough Sch.

Dist., 131 F.3d 807, 814 (9th Cir. 1997); In re Dominelli, 788

F.2d 584, 585 (9th Cir. 1986). 

[9] However, in Principal Life Insurance Co. v. Robinson,

394 F.3d 665 (9th Cir. 2005), we held that Abbott does not

apply to private contract disputes, and suggested that the test

may only be appropriate in the administrative law context.

The court noted, because an administrative action “has consequences for many members of the general public,” it is “prudent for courts to limit their review of such actions to those

involving the possibility of concrete injury greater than speculative or remote financial contingencies.” Id. at 670-71. The

court also observed that the concerns expressed in Abbott over

“judicial entanglement,” “allocation of authority,” and the

risks of “wide-ranging and remote adverse consequences” in

administrative agency actions do not apply to private party

contract disputes. Id. at 671. 

The court then declined to apply the Abbott test to a private

party contract dispute over a rent-adjustment provision, finding the matter ripe even though the provision was contingent

14The dispute at issue in Abbott was over a prescription drug labeling

statutory requirement, namely, whether the established name of the drug

must be used every time the propriety name is employed. 387 U.S. at 137-

39. 

IN THE MATTER OF COLEMAN 3783
upon future property value. Noting that “the fundamental role

of the courts is to resolve concrete and present disputes

between parties,” the court held that the proper test for ripeness in private party contract disputes is “the traditional ripeness standard, namely, whether ‘there is a substantial

controversy, between parties having adverse legal interests, of

sufficient immediacy and reality to warrant the issuance of a

declaratory judgment.’ ” Id. at 671 (quoting Md. Cas. Co.,

312 U.S. at 273).15

Principal does not tell us whether the Abbott test would be

appropriate in this context—a private party dispute that is

governed not by contract but by the Bankruptcy Code. However, prior to Principal, disputes in the bankruptcy context

were subjected to the Abbott ripeness test. See, e.g., Dominelli, 788 F.2d at 585-86 (dispute as to whether debtor’s estate

could be required to pay legal expenses of creditor committee

ripe under Abbott test even though counsel had not yet sought

fees); In re Gen. Carriers Corp., 258 B.R. 181, 186 (B.A.P.

9th Cir. 2001) (dispute over bankruptcy court’s jurisdiction to

enter abstention order ripe under Abbott test). Because Principal did not (and could not) overrule Dominelli’s application

of Abbott in the bankruptcy context, we must apply Abbott

here.16

15Because this standard is the constitutional component of ripeness,

Principal’s holding essentially eliminated the prudential component from

ripeness determinations in private party contract disputes. 

16We note, however, that there is considerable tension between the reasoning in Principal and Dominelli’s application of Abbott. The reasoning

Principal employed to reject the Abbott test in private party disputes

applies to many disputes in the bankruptcy context. Generally there will

not be a risk of “judicial entanglement in administrative agency actions”

nor “allocation of authority concerns.” Principal, 394 F.3d at 671. Of

course, where the bankruptcy court must interpret a Code provision, for

example, the decision may “ha[ve] consequences for many members of

the general public,” or even potentially “wide-ranging and remote adverse

consequences,” id., necessitating the searching prudential inquiry provided

by Abbott. Cases like this, however, which involve a unique case-specific

3784 IN THE MATTER OF COLEMAN
3. Prudential Ripeness Here

A. Background 

Turning to the specific inquiry at hand, we note that Courts

of Appeal are currently split as to whether student loan dischargeability determinations are ripe substantially in advance

of plan completion. Most courts to address the issue do not

specify which ripeness standard they are employing. The

Ninth Circuit Bankruptcy Appellate Panel (“BAP”) has held

that the issue of student loan dischargeability is ripe before

the completion of plan payments. In re Taylor, 223 B.R. 747,

751-52 (B.A.P. 9th Cir. 1998), overruled on other grounds by

Saxman, 325 F.3d at 1175.17 Without explicitly applying the

inquiry rather than an interpretive endeavor, are unlikely to have “wideranging and remote adverse consequences.” Because they are necessarily

fact-intensive, the fitness prong of the Abbott test maps onto them poorly:

The traditional formulation of that rule is that a case is more likely to be

“fit” if it involves “pure legal questions that require little factual development,” San Diego County Gun Rights Comm. v. Reno, 98 F.3d 1121, 1132

(9th Cir. 1996), but, as we discuss, bankruptcy courts often must decide

questions that are almost exclusively factual and require a good deal of

factual development. Although the “fitness” prong of the Abbott test does

not preclude factual inquiries where further delay would not aid in the

decision, Principal suggests that the better route may be to recognize that

the concerns motivating Abbott are not present here and do not justify its

application in this context. 

17Educational Credit argues that Taylor conflicts with In re Heincy, 858

F.2d 548, 550 (9th Cir. 1988). There, the debtor sought a dischargeability

determination for criminal restitution debt. However, whether that debt

was excepted from discharge depended on whether the debtor completed

plan payments, because the standards for dischargeability of criminal restitution differed depending on whether the debtor completed the plan. 858

F.2d 548 at 550. The court reasoned, “Because the plan is still in progress,

the bankruptcy court could not have known which discharge provision

[§§1328(a) or (b)] would apply,” and it was highly unlikely the restitution

payments would be dischargeable in any event. Id. However, this reasoning does not apply in the student loan context. In the student loan context,

the standard for nondischargeability is the same whether it is excepted

IN THE MATTER OF COLEMAN 3785
Abbott test or any particular ripeness standard, the BAP reasoned that the issue was ripe because Bankruptcy Rule

4007(b) expressly permits the filing of a § 523(a)(8) complaint “at any time,” and no statute or policy conflicts with the

filing of such a complaint at any time. Taylor, 223 B.R. at

751-752. 

The Fourth Circuit has also held that undue hardship determinations may be ripe in advance of plan completion. In re

Ekenasi, 325 F.3d 541, 547 (4th Cir. 2003). The court

expressly “decline[d] to adopt a hard and fast rule which

would preclude bankruptcy courts from ever entertaining a

proceeding to discharge student loan obligations until at or

near the time the debtor has completed payments under a confirmed Chapter 13 plan.” A bankruptcy court in the Southern

District of Ohio also took this approach. In re Strahm, 327

B.R. 319, 323-24 (Bankr. S.D. Ohio 2005).18

under §§ 1328(a) or (b). See 11 U.S.C. §§ 523(a), 1382(a)(2). In other

words, in Heincy, the court had no legal framework to apply to the dischargeability determination prior to plan completion. Not so with student

loan dischargeability determinations. Because Heincy’s ripeness conclusion was determined by the bankruptcy court’s inability to decide the dischargeability question at that point, and because the court found it highly

unlikely that criminal restitution would ever be dischargeable, the holding

has no bearing on the ripeness of undue hardship determinations prior to

plan completion. Heincy did not conclude that no case or controversy

existed, and we assume that the ripeness conclusion was a prudential one

—the court understandably declined to undertake an inquiry that both

lacked an applicable standard and would more than likely never take

effect. 

18Educational Credit faults these courts for failing to address the jurisdictional question, but, again, the question is jurisdictional only if it speaks

to constitutional ripeness rather than prudential ripeness—if a matter is

constitutionally ripe, the court may decline to consider it for prudential

reasons, but it does not lack jurisdiction to consider the case. The courts

taking the opposite approach do not address the jurisdictional question

either. 

3786 IN THE MATTER OF COLEMAN
Two Courts of Appeal disagree with Taylor. The Eighth

Circuit, without applying any particular ripeness test,19 held

that, in undue hardship determinations, “the factual question

is whether there is undue hardship at the time of discharge,

not whether there is undue hardship at the time that a

§ 523(a)(8) proceeding is commenced.” In re Bender, 368

F.3d 846, 848 (8th Cir. 2004). The court reasoned that student

loan dischargeability proceedings “should take place relatively close to [the date of discharge] so that the court can

make its determination in light of the debtor’s actual circumstances at the relevant time.” Id. Similarly, the Fifth Circuit

has held, in contrast to Taylor, that the undue hardship determination is not ripe until plan completion because dischargeability is not available until plan completion.20 In re Rubarts,

896 F.2d 107, 109 (5th Cir. 1990).

21

[10] Applying Abbott, we agree with the Fourth Circuit and

with the Ninth Circuit BAP that an undue hardship determination can be ripe substantially in advance of plan completion.

19The bankruptcy court below did employ the Abbott test. In re Bender,

297 B.R. 126, 132 (Bankr. D. Neb. 2003). 

20The Fifth Circuit court cited In re Heincy for the proposition that

“Under both the express wording of section 1328(a) and Bankr.R.

4007(d), an objection to dischargeability cannot be filed nor heard prior

to the occurrence of one of those two events.” Rubarts, 896 F.2d at 109.

However, this misunderstands Heincy’s holding, which was only that a

criminal restitution dischargeability determination should not be made

prior to plan completion, given the differing standards depending upon

whether payments were completed. The Taylor court distinguished Heincy

on the grounds that the debt at issue there was for criminal restitution, not

student loans, without clarifying that the dischargeability determination

could not be made prior to plan completion in the latter case. See Taylor,

223 B.R. at 751. 

21Several bankruptcy courts have also agreed with that approach. See,

e.g., In re Pair, 269 B.R. 719, 721 (Bankr. N.D. Ala. 2001); In re Soler,

250 B.R. 694, 697 (Bankr. D. Minn. 2000); In re Raisor, 180 B.R. 163,

166 (Bankr. E.D. Tex. 1995). 

IN THE MATTER OF COLEMAN 3787
B. Fitness 

[11] The purpose of the “fitness” test under Abbott is to

delay consideration of the issue until the pertinent facts have

been well-developed in cases where further factual development would aid the court’s consideration. See, e.g., Nat’l Park

Hospitality Ass’n v. Dep’t of the Interior, 538 U.S. 803, 812

(2003) (further factual development would “significantly

advance our ability to deal with the legal issues presented” so

the matter determined not ripe for judicial review) (internal

quotation marks omitted); Lujan v. Nat’l Wildlife Fed’n, 497

U.S. 871, 891 (1990) (regulation ordinarily not ripe for review

“until the scope of the controversy has been reduced to more

manageable proportions, and its factual components fleshed

out, by concrete action applying the regulation to the claimant’s situation in a fashion that harms or threatens to harm

him”); Earth Island Inst. v. Ruthenbeck, 490 F.3d 687, 695

(9th Cir. 2007) (issue not fit for review absent proper factual

context to aid court’s determination); Natural Res. Def. Council, Inc. v. EPA, 22 F.3d 1125, 1133 (D.C. Cir. 1994) (considering “whether consideration of the issue would benefit from

a more concrete setting” in determining whether an issue is

“fit” under the Abbott test). 

[12] Although a case is more likely to be “fit” if it involves

“pure legal questions that require little factual development,”

San Diego County Gun Rights Committee, 98 F.3d at 1132,

fact-intensive inquiries that depend on further factual development may nevertheless be ripe if, as here, that development

would do little to aid the court’s decision. In the bankruptcy

context, there are many situations in which the factual context

may never be ideally well-developed. Congress has given

bankruptcy courts the task of undertaking complex factual

inquiries that depend, by their very nature, on future events

and contingencies. Whether a bankruptcy court decides to lift

an automatic stay depends upon its assessment of the debtor’s

ability to adequately protect against future decline in the collateral’s value and ultimately successfully reorganize. 11

3788 IN THE MATTER OF COLEMAN
U.S.C. §§ 362(d), 363(e); United Sav. Ass’n of Tex. v. Timbers of Inwood Forest Assocs., Ltd., 484 U.S. 365, 377

(1988). At that moment the bankruptcy court essentially must

predict whether the debtor is doomed or has some reasonable

chance of rehabilitation. Whether a bankruptcy court decides

to confirm a Chapter 13 plan depends upon the likelihood that

the debtor will be able to make all required payments under

the plan. 11 U.S.C. § 1325(a)(6). In all of these situations,

delay is unlikely to provide much, if any, additional benefit to

the bankruptcy court’s resolution of the issue. 

[13] The same is true here: The undue hardship inquiry

itself contemplates factual contingencies many years into the

future. See Coleman, 333 B.R. at 847. Under the second

prong of the undue hardship test, the debtor must show that

“additional circumstances exist indicating that this state of

affairs is likely to persist for a significant portion of the repayment period of the student loans.” Saxman, 325 F.3d at 1173.

Many student loan repayment periods are thirty years in

duration—a “significant portion” of this period is far longer

than the duration between the initiation and conclusion of the

Chapter 13 plan. A determination of lack of ripeness due to

the factual contingency of the debtor’s financial situation

makes little sense since the court must always speculate on

debtor’s financial situation years into the future. 

[14] Educational Credit also argues that the determination

whether “the debtor has made good faith efforts to repay the

loans,” Saxman, 325 F.3d at 1173, cannot be made until at or

near plan completion. However, whether it is premature for

the court to make such a determination varies depending on

each debtor’s situation. See, e.g., Ekenasi, 325 F.3d at 547. If

the debtor has been trying in vain to make student loan payments for the past fifteen years, the facts may be sufficiently

well developed for the court to conclude that the debtor made

good faith efforts to repay. If, on the other hand, the debtor

files for bankruptcy immediately upon graduating from college, it will likely be necessary to wait the duration of the plan

IN THE MATTER OF COLEMAN 3789
before a good faith determination is possible. Here Coleman

has been trying to repay her student loans since 1999, which

seems to us a sufficient amount of time for the bankruptcy

court to evaluate whether she has made a good faith attempt

at repayment. 

[15] We disagree with the Eighth Circuit’s conclusion that

bankruptcy courts should not make an undue hardship determination until the time of discharge because “the factual

question is whether there is undue hardship at the time of discharge, not whether there is undue hardship at the time that

a § 523(a)(8) proceeding is commenced.” Bender, 368 F.3d at

848. The bankruptcy court below correctly noted that there is

no clause in § 523(a)(8) specifying that the undue hardship

must exist exactly at the time of discharge. Coleman, 333

B.R. at 849. The Fourth Circuit’s approach permits a debtor

to choose the “snapshot date” for determining undue hardship

on the grounds that the “text of the pertinent statute does not

prohibit such an advance determination.” Ekenasi, 325 F.3d at

547. 

This approach is consistent with the statute and makes

sense in light of Bankruptcy Rule 4007(b). While that rule

could not, of course, render a constitutionally unripe matter

ripe, it counsels in favor of a finding of prudential ripeness.

C. Hardship 

[16] Hardship to the debtor from postponing a decision in

this situation supports a finding of ripeness. Abbott, 387 U.S.

at 149. Here, the hardship to Coleman is committing to a

Chapter 13 plan for three to five years without any guarantee

that her student loans will be discharged at the end of this

time period. Because debtors must commit all of their disposable income to payments under a Chapter 13 plan, 11 U.S.C.

§ 1325(b)(1)(2), five years repayment is a considerable burden to bear without any guarantee that the debt will be ultimately discharged. 11 U.S.C. § 1328(a)(2). 

3790 IN THE MATTER OF COLEMAN
Theoretically, Coleman could convert her case to a Chapter

7 bankruptcy, assuming that she meets the requirements for

filing under that Chapter,22 and receive a discharge under 11

U.S.C. § 727(a). However, it appears the reason Coleman

filed under Chapter 13 rather than Chapter 7 was that she was

unable to afford an up-front payment for the undue hardship

litigation. In Chapter 7, debtors’ attorneys may not be paid

from the estate, so unless the attorney is paid up-front, she is

unlikely to be paid.23 In a Chapter 13, however, the attorney

is often paid as part of the plan.24

Because Coleman apparently cannot finance the undue

hardship litigation up-front, she would have to proceed with

the undue hardship litigation pro se, if at all. 

A fundamental purpose driving the bankruptcy system is to

“relieve the honest debtor from the weight of oppressive

indebtedness, and permit him to start afresh free from the

obligations and responsibilities consequent upon business

misfortunes.” Local Loan v. Hunt, 292 U.S. 234, 244 (1934).

Debtors who are primarily burdened by student debt will not

emerge from bankruptcy with a “fresh start” if those student

loan debts are not dischargeable—and if they are forced to

pursue the undue hardship matter pro se, the likelihood of a

22See 11 U.S.C. § 727(b). 

23See, e.g., Lamie v. U. S. Trustee, 540 U.S. 526, 534-36 (2004). 

24Unlike Chapter 7 cases, attorneys’ fees in Chapter 13 cases are normally paid out of the plan as an administrative expense. Bankruptcy Code

11 U.S.C. § 503(b)(2) allows administrative expense status for compensation awarded under Code § 330(a). Bankruptcy Code § 330(a) allows compensation for a professional person employed under § 327. Although

compensation under those provisions is limited to attorneys for the trustee,

not for the debtor, Lamie, 540 U.S. at 534-36, it is common for this distinction to be blurred in Chapter 13 cases because a Chapter 13 debtor

exercises some of the powers of a trustee. 11 U.S.C. § 1303. This results

in attorneys’ fees being paid as administrative expenses in Chapter 13

cases. Pursuant to 11 U.S.C. § 1326(b)(1), these fees are often paid early

in the case. 

IN THE MATTER OF COLEMAN 3791
successful undue hardship hearing is probably substantially

reduced given the complexity of the inquiry. See generally,

Feather D. Baron, The Nondischargeability of Student Loans

in Bankruptcy: How the Prevailing “Undue Hardship” Test

Creates Hardship of Its Own, 42 U.S.F. L. Rev. 265 (2007).

Because the undue hardship standard is extremely difficult to

meet,25 a debtor who would meet the undue hardship standard

and yet is unable to obtain an undue hardship determination

because it is not yet ripe may be forced to rely on public

benefits—or may turn to credit as a means of meeting their

basic needs. See generally, Elizabeth Warren, Less Stigma or

More Financial Distress: An Empirical Analysis of the

Extraordinary Increase in Bankruptcy Filings, 59 Stan. L.

Rev. 213 (2006). In a case where a debtor faces genuine

undue hardship from student loan debt, the debtor’s best shot

at a fresh start may be to litigate the matter in a Chapter 13

case.26

25See, e.g., Brunner v. N.Y. State Higher Educ. Serv. Corp. (In re Brunner), 46 B.R. 752, 753 (Bankr. S.D.N.Y. 1985), aff’d, 831 F.2d 395 (2d

Cir. 1987) (noting that “[t]he existence of the adjective ‘undue’ indicates

that Congress viewed garden-variety hardship as [an] insufficient excuse

for a discharge of student loans”). 

26An additional reason for permitting undue hardship determinations to

be made closer to the time of filing is that the amount of repayment to the

student loan creditor through the plan may vary depending upon whether

the loans are dischargeable. Section 1322(b)(1) provides that a plan may

create a class of claims that is treated differently from other unsecured

claims if the plan does not discriminate unfairly. Section 1322(b)(1) provides that a debtor’s plan may “designate a class or classes of unsecured

claims, as provided in section 1122 of this title, but [the plan] may not discriminate unfairly against any class so designated.” The debtor or trustee

may wish to seek to confirm a plan that classifies the student loan creditor

differently from other creditors depending on whether the student loan

creditor is entitled to payments after the completion of the plan and subsequent discharge. Although non-dischargeability alone is not a sufficient

reason for permitting debtors to classify student loans differently from

other debt, if discrimination furthers the goals of the debtor, satisfies the

purposes behind Chapter 13, and does not require any creditor or group

of creditors to bear an unreasonable burden, the debtor may be able to

3792 IN THE MATTER OF COLEMAN
[17] Prudential ripeness considerations do not warrant taking the undue hardship determination away from the bankruptcy court at the time when its resolution may be integral

to successful completion of the plan. Absent a constitutional

ripeness impediment to the undue hardship determination—

which does not exist here—we see no prudential reason to

delay the determination where the record, as here, is sufficiently well-developed for the bankruptcy court to undertake

the analysis.

AFFIRMED.

make greater payments to the student loan creditors under the plan. In re

Sperna, 173 B.R. 654, 660-61 (B.A.P. 9th Cir. 1994.). Because one of the

key purposes of the Bankruptcy Code is to provide the debtor with a

“fresh start,” the plan might classify the student loan creditor for greater

repayments so that the debtor has less student loan debt remaining upon

emerging from bankruptcy. See, e.g. Seth J. Gerson, Separate Classification of Student Loans in Chapter 13, 73 Wash. U. L.Q. 269, 278-79

(1995). Without an undue hardship determination, this classification analysis is greatly impeded. A resolution of the undue hardship question will

certainly aid the bankruptcy court and the parties as they move forward

with the Chapter 13 plan. 

IN THE MATTER OF COLEMAN 3793