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UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF FLORIDA

WEST PALM BEACH DIVISION

In re:

ROBERT WALKER, and Case No. 20-11431-EPK

TAMIKO PEELE,

Chapter 13

Debtors.

_______________________________/

EDUCATIONAL CREDIT MANAGEMENT CORPORATION’S MOTION FOR 

REHEARING OF ORDER SUSTAINING OBJECTION TO CLAIM NO. 2

Creditor Educational Credit Management Corporation (“ECMC”), the owner and 

holder of the student loan debt that is the subject of Proof of Claim 2-1 (“Claim No. 2”), 

pursuant to Federal Rule of Civil Procedure 60(b), as incorporated by Federal Rule of 

Bankruptcy Procedure 9024, moves the Court for rehearing of the Court’s Order 

Sustaining Objection to Claim Filed by Educational Credit Management Corporation

(the “Order)(D.E. 64). In support thereof, ECMC states as follows:

FACTUAL AND PROCEDURAL BACKGROUND

1. ECMC is a private, nonprofit corporation and guaranty agency, 

headquartered in Minneapolis, Minnesota. ECMC provides specialized guarantor 

services to the Department of Education (“ED”) and other guaranty agencies pursuant to 

the Federal Family Education Loan Program (“FFELP”), including accepting transfer of 

title to certain student loan accounts from ED and other FFELP guaranty agencies on 

which the student loan borrower has filed bankruptcy. 

2. On March 3, 2020, ECMC filed Claim No. 2 in the amount of $43,598.20

with respect to a non-dischargeable consolidated federally-backed student loan that was 

made to Debtor Tamiko Peele (“Tamiko”) under the FFELP and that is owe ECMC. As 

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set forth in the Proof of Claim, notices with respect to Claim No. 2 were to be sent to 

Educational Credit Management Corporation, P.O. Box 16408, St. Paul, MN 55116-

0408.

3. Effective March, 2020, due to the Coronavirus pandemic, ECMC’s 

corporate offices, which are located in Minneapolis, MN, were closed and its employees 

have been remotely since that time. 

4. On July 29, 2020, ECMC’s legal department received a copy of the 

Court’s Order, which reflected that the Court had sustained the “Debtor’s Objection to 

Claim Filed by Educational Credit Management Corp., Claim No. 2 (DE#47).” The 

Order provided that the claim was stricken and disallowed. The Order reflected that it 

was heard on July 4, 2020, and was entered on July 17, 2020.

5. Upon learning of the entry of the Order, on August 10, 2020, the attorney 

in ECMC’s legal department overseeing matters in the state of Florida contacted ECMC’s 

undersigned outside counsel, John Eaton, who represents ECMC in bankruptcy matters in 

the state of Florida. Mr. Eaton checked the docket on the evening of August 10, 2020, 

and discovered that on June 15, 2020, the Debtors filed their Objection to Claim on 

Shortened Notice (the “Objection”)(D.E. 47) in which the Debtors objected to Claim No. 

2 that was filed by ECMC.

1

 In the Objection, the Debtors objected to Claim No. 2 on the 

following basis: “Sustain and Strike. The Debtors believe this debt has been discharged 

through the Total Permanent Disability discharge, provided by the US Department of 

Education.” No exhibits were attached to the Objection, including no documentary 

1 Mr. Eaton left for Jacksonville, Florida on the morning of August 11, 2020 in 

order to get his son checked in to his freshman dormitory for the Fall, 2020 semester. 

Nevertheless, Mr. Eaton immediately began an investigation into the facts, and prepared

a draft of the instant motion. 

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evidence to support the Debtors’ contention that Tamiko had received a total permanent 

disability discharge from ED.

6. The Objection contained a “Service List,” and included ECMC and the 

address set forth in the Proof of Claim. However, the Objection does not include any 

Certificate of Service certifying that a copy of the Objection was, in fact, served on 

ECMC. That being said, the Docket reflects that a Notice of Hearing on the Objection 

for July 14, 2020 at 1:00 p.m. (D.E. 48) was served on ECMC at the address in Claim No. 

2. See D.E. 51. 

7. Pursuant to 11 U.S.C. § 502(a) and Bankr. R. 3001(f), a properly filed 

proof of claim is prima facie evidence of the validity and amount of the claim. The 

Objection states that the Debtors believe that Tamiko has received a TPD discharge of 

her student loan debt owed to ECMC. However, the Objection does not contain any 

evidence to support that contention. 

8. Moreover, after receiving a copy of the Order, ECMC’s legal department 

checked ECMC’s records.

2

 Notwithstanding what the Certificate of Service for the 

Objection states, ECMC does not have any record of anyone at ECMC having received a 

copy of the Objection or the Notice of Hearing. See Klisch Declaration at ¶5. Instead, 

according to ECMC’s records, the first time ECMC ever learned of any Objection with 

respect to its claim is when the Order was received on July 29, 2020, only two (2) days 

before it became final. Id. More importantly, at this time, ECMC’s records did not 

2 Attached hereto as Exhibit “1” is the Declaration of Kerry Klisch, a litigation 

specialist for ECMC, reflecting the search that Mr. Klisch effectuated and what is 

reflected in ECMC’s records.

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reflect anything showing any final approval of a Total Permanent Disability (“TPD”)

application for Tamiko’s loan to ECMC having been granted. Id. at ¶8.

9. For that reason, Ms. Klisch contacted Nelnet, the servicer for Tamiko’s 

FFELP Loan, with respect to the contention that she had received a TPD discharge. Id. at 

¶9. ECMC learned that Tamiko was approved for a TPD discharge in 2015, but the 

FFELP Loan was reinstated in May of 2017 because Tamika failed ED’s three-year

income monitoring period. Specifically, Tamiko did not provide ED or the loan servicer 

with income verification for the time period of January 8, 2016 to January 7, 2017.3 Id.

10. ECMC further understands that the one-year period that Tamiko had to 

appeal that decision ended in May of 2018. Therefore, in order to obtain a TPD 

discharge of the FFELP Loan, Tamiko will need to reapply to have the loan discharged. 

Id. at ¶10.

11. In addition, ECMC’s undersigned counsel reviewed a copy of the Debtors’

Schedules of Assets and Liabilities (the “Schedules”) (D.E. 8) that were filed with the 

Court on February 13, 2020. In the Schedules, the Debtors listed a student loan debt as 

follows: “US Dept. of Education, ECMC/Bankruptcy, P.O. Box 16408, St. Paul, MN 

55116.” Schedules at p. 22. The amount of this student loan was listed as $35,054.00, 

and having been “Opened 11/05 Last Active 12/12/19.” This student loan was not listed

3

If a borrower receives a TPD discharge, the borrower is required to provide ED 

and/or the loan servicer with income verification for a period of three years after the 

discharge is granted to confirm that the borrower has not earned income in excess of the 

federal poverty guidelines amount for a family size of 2 in the borrower’s respective 

state, regardless of his or her actual family size. Id. at n. 2.

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as disputed, contingent, or unliquidated, and nothing in the Schedules indicated anything 

about a TPD discharge.4

12. In this case, rehearing should be granted, and the Order vacated, and

ECMC’s Claim No. 2 allowed in the full amount as filed.

ARGUMENT

In this case, the Court should grant rehearing and vacate the Order. Fed. R. Civ. 

P. 60(b)(1) authorizes the setting aside of final judgments and orders which result from 

“mistake, inadvertence, surprise, or excusable neglect.” Whether inadvertence and 

excusable neglect exist “is an equitable inquiry turning on ‘all relevant circumstances,’ 

and the pertinent factors include ‘the danger of prejudice to the opposing party, the length 

of the delay and its potential impact on judicial proceedings, the reason for the delay, and 

whether the movant acted in good faith.’” Grant v. Pottinger-Gibson, 725 F. App’x 772, 

775 (11th Cir. 2018) (quoting Cheney v. Anchor Glass Container Corp., 71 F.3 848, 850 

(11th Cir. 1996)).5 

All the requisite elements of Fed. R. Civ. P. 60(b)(1) are present in this case. 

ECMC’s offices have been closed, and its employees have been working from their 

respective homes, since March, 2020 due to the ongoing coronavirus or COVID-19 

pandemic. A the Klisch Declaration reflects, ECMC’s records show that ECMC never 

4 The Debtors also listed two other student loans for Tamiko at p. 22 for the 

Department of Education / Nelnet. Again, both of those were shown as having been

opened in November 2020, and neither was shown as being disputed, contingent or 

unliquidated.

5 When seeking to set aside a default judgment for inadvertence and excusable 

neglect, the movant must demonstrate (1) that it had a meritorious defense that might 

have affected the outcome, (2) that granting the motion would not result in prejudice to 

the non-defaulting party, and (3) that a good reason existed for failing to timely respond 

to the complaint. Id.; see also Valdez v. Feltman, 328 F.3d 1291, 1295 (11th Cir. 2003).

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received a copy of the Objection or the Notice of Hearing. Instead, the first time that 

ECMC’s legal department ever learned of the Objection or the Notice of Hearing was 

when that department received a copy of the Order on July 29, 2020, only two (2) days 

before the Order became final. ECMC’s attorney who oversees bankruptcy matters for 

ECMC in the State of Florida retained ECMC’s undersigned outside local counsel on 

August 10, 2020 once he learned of the Order, and investigated the circumstances as to 

the reason why a response to the Objection was never filed. ECMC’s undersigned 

counsel swiftly prepared and filed the instant motion for rehearing after it was confirmed 

that ECMC never received the Objection or the Notice of Hearing. 

In fact, as noted above, ECMC was not even aware of the Objection and the 

relief that was requested by the Debtors in the Objection until the Order was received. 

While the docket reflects that the Debtors served a Notice of Hearing on ECMC on or 

about June 15, 2020, there is nothing in the docket to reflect that a copy of the Objection 

was ever served on ECMC. And, as the Klisch Declaration makes clear, ECMC’s 

records do not reflect that the Objection or Notice of Hearing were ever received by 

ECMC. 

But regardless, under the circumstances, cause exists to grant rehearing in order

to correct clear error and to manifest injustice. Specifically, the basis of the Objection, i.e.

a purported total permanent disability discharge of the underlying FFELP Loan by ED 

does not appear to be accurate. First, there is no evidence of record to support the 

Debtors’ contention that Tamiko received approval of a TPD request as nothing was even 

attached to the Objection or filed with the Court. Second, having checked with Nelnet, 

the servicer for the FFELP Loan, ECMC learned that although the TPD was originally

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approved, the FFELP Loan was reinstated in May of 2017 because Tamika failed ED’s 

three-year income monitoring period after failing to provide ED with the requisite income 

verification.

6

 Therefore, the FFELP Loan is still due and owing. 

Alternatively, ECMC submits that even if the Court determines that Rule 

60(b)(1) does not apply, the Court should nevertheless exercise its broad discretion to 

grant rehearing and vacate the Order under the catch-all provision of Fed. R. Civ. P. 

60(b)(6). See Fed. R. Civ. P. 60(b)(6)(court is authorized to grant relief for “any other 

reason that justifies relief.”). In this case, where the Klisch Declaration shows that 

ECMC never received a copy of the Motion or the Notice of Hearing, and the Debtors’

own Schedules reflect the student loan debt owed to ECMC as having been active as 

recently as December, 2019, and the underlying debt was not listed as disputed, 

unliquidated, or contingent, the Order should be vacated and Claim No. 2 allowed in the 

full amount as filed.7

 WHEREFORE, Educational Credit Management Corporation requests that the

Court enter an Order that vacates the Court’s July 17, 2020 Order (D.E. 64), allows 

ECMC’s Claim No. 2 in the full amount as filed, and that grants ECMC such other and 

further relief as the Court deems necessary and proper.

6 Granting ECMC’s motion would not impose undue prejudice upon the Debtors;

rather, it would simply mean that ECMC will receive the same treatment under the 

confirmed Third Amended Plan as all other general unsecured creditors. Indeed, there is 

not a single shred of evidence in the Objection that supports the Debtors’ contention. 

7 ECMC submits that the Court may also be able to grant relief pursuant to Fed. R. 

Civ. P. 60(b)(3). The basis for relief set forth in the Objection is wholly inconsistent 

with the Debtors’ own Schedules (that were filed and signed under penalty of perjury) 

where they listed the student loan debt to ECMC in a specific amount, and for an account 

having been active as recently as December, 2019. Again, the Debtors did not list the 

debt as disputed, unliquidated or disputed, and did not indicate anything about a TPD 

discharge.

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Dated: August 13, 2020

SHAWDE & EATON, P.L.

Attorneys for ECMC

1792 Bell Tower Lane

Weston, Florida 33326

Telephone: (305) 376-3176

By: /s/ John D. Eaton

John D. Eaton

Florida Bar No. 0861367

jeaton@shawde-eaton.com

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing Motion was 

served on August 13, 2020, via CM/ECF Transmission, to Drake Ozment, Esq., Counsel 

for the Debtors, 2001 Palm Beach Lakes Blvd., Suite 500, West Palm Beach, Florida 

44409, and to all other CM/ECF registered users in this case.

By: /s/ John D. Eaton

John D. Eaton

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IN THE UNITED STATES BATIKRUPTCY COURT

SOUTHERN DISTRICT OF FLORIDA

WEST PALM BEACH DIYISION

In re:

ROBERT WALKER, and

TAMIKO PAELE,

Case No.20-11431-EPK

Chapter 13

Debtors.

DE,CLARATION OF KERRY KLISCH

I, Kerry Klisch, having first been duly sworn according to law, makes oath upon

her personal knowledge as set forth herein, and states as follows:

l. I am a Litigation Specialist at ECMC Shared Services Company

("ECMCSSC'), and in such capacity, I have personal knowledge of the information set

forth herein. ECMCSSC is a wholly-owned subsidiary of ECMC Group. ECMCSSC is

a limited liability company that consolidated shared corporate services of the ECMC

family group of companies, including the provision of legal services for Educational

Credit Management Corporation ("ECMC"), which is also a wholly-owned subsidiary of

ECMC Group.

2. ECMC is a guarantor in the Federal Family Educational Loan Program

("FFELP-) and acts as a specialized guaranCIr in that it accepts assignment from other

guaranty agencies in the FFELP where a borrower has filed bankruptcy and/or has

initiated an adversary proceeding regarding fhe student loan debt owed.

1

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3. In order to fulfill my responsibilities, I have access to electonic records

maintained by ECMC.I The records contained in ECMC's database are made at or near

the time of the transaction recorded, by or from information transmitted by a person with

knowledge of the transaction, and are kept in the course of ECMC's regularly conducted

business. In addition, I have access to records maintained by the United States

Deparhroent of Education ("ED") in the National Student Loan Data System ("I{SLDS")

which provides a centralized view of a borrower's federal student aid, including loans

and grants that he or she has received.

4, On August 3,2020, I conducted a review of ECMC's records with respect

to the consolidated FFELP Loan that is owed to ECMC by Debtor Tamiko Peele

(o'Tamiko") after ECMC received a copy of the Court's July 17, 2A20 Order Sustaining

Objectian to Claim Filed by Educational Credit Management Corporation (the

"Order)(D.E. 64) in which the Court sustained an Obiection to Claim an Shortened

Notice (the "Objection")(D.E. 47). In the Order, the Court struck and disallowed

ECMC's Proof of Claim No. 2-1 (*Claim No. 2") in the amount of $43,598.20 with

respect to the amount Tamiko owes or her non-dischargeable FFELP Loan that was

made pursuant to the FFELP.

5. A review of ECMC's records reveals that ECMC never received a copy of

the Objection, or the corresponding Notice of Hearing (D.8. 48) that is reflected on the

Court's docket. Instead, ECMC's legal department did not leam about the Objection

until July 29, 2020, when ECMC's legal department received a copy of the Court's

t Effective March, 2020, due to the Coronavirus pandemic, ECMC's corporate

offices, which are located in Minneapolis, MN, were closed and its employees have been

remotely since that time.

2

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Order, which reflected that the Court had sustained the "Debtor's Objection to Claim

Filed by Educational Credit Management Corp., Claim No. 2 (DE#47).-

6. After receiving the Order, ECMC obtained a copy of the Objection from

Pacer and began investigating the matter. On August 10,2020, the attorney in ECMC's

legal department overseeing matters in the state of Florida contacted one of ECMC's

outside counsel, John Eaton, who represents ECMC in bankruptcy maffers in the state of

Florida to address the Order and to file an appropriate motion with the Court.

7. In the Objection, the Debtors objected to Claim No. 2 on the following

basis: "Sustain and Strike. The Debtors believe this debt has been discharged through the

Total Permanent Disability discharge, provided by the US Department of Education."

No exhibits were attached to the Objection to support the Debtors' contention that

Tamiko had received a total permanent disability discharge from ED.

8. I have also reviewed ECMC's records with respect to the Debtors'

oontention of a TPD discharge. According to ECMC's records, ECMC has no record of

any such TPD discharge being approved by ED. In addition, nothing contained in the

NDSLD for Tamiko reflects ED approving any TPD discharge with respect to her FFELP

Loan owed to ECMC.

9. For that reason, I contacted Nelnet, the servicer for Tamiko's FFELP

Loan, with respect to the contention that she had received a TPD discharge. I leamed that

Tamiko was approved for a TPD discharge in 2015, but the FFELP Loan was reinstated

in May of 2Al7 because Tamika failed ED's three-year income monitoring period.

J

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Specifically, Tamiko did not provide ED or the loan servicer with income verification for

the time period of January 8, 2015 to January 7,2017.2

10. I further understand that the one-year period that Tamiko had to appeal

that decision ended in May of 2018. Therefore, in order to obtain a TPD discharge of the

FFELP Loan, Tamiko will need to reapply to have the loan discharged.

Pursuant to 28 U.S.C . *1746,I declare under penalty of perjury that foregoing is

true and correct.

By:

Date: tr l3 z,ts?-o

4836-39234408,v. I

2 If a borrower receives a TPD discharge, the borrower is required to provide ED

and/or the loan servicer with income verifisation for a period of three years after the

discharge is granted to confirm t}at the borrower has not eamed iocome in excess of the

poverty guidelines for a family size of 2 in the state that they live in, regardless of actual

family size.

4

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