By order of the Bank ruptcy Appe llate Panel, the prec edential effec t of t his de c isi on is l im ite d to thec as e an d p ar tie s p ur su an t to 6th Cir. BAP LBR 8013-1(

b) . See also 6th Cir. BAP LBR 8010-1( c)

. File Na me: 14b0005n.06
BA NK RU P TC Y A P P ELLA TE P AN EL OF THE SI XT H C IR CU IT
I n r e : C O LLE E N R E N E E T R

U D E L,
Debtor.

______________________________________ C O LLE E N R E N E E T R

U D E L,
Pla int if f - Ap pe lla

nt,

v
. UNI TED STATES DEPARTMENT OF EDUCATI ON, et a l. , De fe nd ants - A

pp e lle e s.

______________________________________ ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) No. 13-8049

Appea l from the United States B ankruptc y Court fo r t he No rt he rn Di str ic t of

Oh io Case No. 12- 5269
Dec ided and F iled: Aug ust 8, 2014
B e fo re : H UM PHR EY , L L OY D, AN D PR EST ON , B ank ru ptc y Ap pe llate Pane l Judg e s.

____________________ CO UN SEL

____________________
ON BRIEF: Erin E. Brizius, UNI TED STATES ATTORNEY ’S OFF I CE, Cleveland, Ohio, James L . B ic ke tt, UN I TE D ST AT ES A TT OR NE Y’ S OF F I CE, Ak

ro n, Oh io, fo r F e de ra l App e lle e . Sc ott2

W. P aris, KEI TH D. WEI NER & A SSOC I ATES CO., L PA, Cleveland, Ohio, for Appellee University

of Akron. Collee n Renee Trudel, Uniontown, Ohio, pr o se.

___________________ OP IN ION

____________________ JOAN A. LLOYD , Ba

nkruptcy Appellate Pane l J udg e. Plaintiff-De b t o r Colleen Renee Trudel (the “De btor”) a

ppeals, pro se , the October 28, 2013 order of the B ankruptc y

Court for the Norther n District of Ohio (the “B ankruptc y Court”) deter mining that the Debtor

was not entitled to an undue hardship discharg e of her student loans under 11 U.S.C. § 523(a )(8) . For the re asons that follow, the Panel a ffirms the B ankruptc y Court’s order

.

ISSU ES

I n this Appea l, the Panel must consider whether the Debtor ’s student loans ar e elig ible for discharg e under

the “undue hardship” sta ndard of 11 U.S.C. § 523(a)(8)

.

JU RI SDI CT ION AN D ST AN DA RD OF RE VI EW

Th e Un ite d St a te s D istri c t Co ur t f or the No rt he rn Di str ic t of

Oh io h a s a

uth or ize d a

pp e a ls to t he Pane l, a

nd no part y has tim e ly

e le c te d to have thi s a

pp e a l he ard

by the dis tr ic t c ourt

. 28 U.S.C. § 158(b)(6), ( c)( 1). A fina l order of t h e b an k ru p t cy court may

be appe aled a s of rig ht pursuant to 28 U.S.C. § 158(a)( 1). F or purpose s of appe al, a final order “ends the liti g ation on the merits and leaves not hing for the court to do but execute the judgment.” Midland Asphalt Cor p.
v
. U n ite d States , 4 89 U.S. 794, 798, 109 S. C t. 1494, 1497 (1989) (c itations omi tted). “De terminations of dischar g eability are final orde rs for pur

poses of a ppeal.” Lowry v. Nicodemus ( In re Ni codem us ), 4 9 7 B. R

. 8 5 2 , 8 5 4 (B

. A. P

. 6 t hC i r. 2 0 1 3 ) ( ci t i n g Cash Am. Fin. Servs., Inc . v. Fox ( In re Fox ), 370 B .R. 104, 109 (B.A .P. 6th C ir. 2007)).Cases fr om this circuit do not state the standard of revie w for eac h prong expli citly , but do 1 discuss exi stence or abse nce of clea r er ror, a ppare ntly treating e ach pr ong as a finding of fac t. See, e.g ., Hertzel v. Educ . Credit Mgmt. Corp. ( In re He rtzel), 329 B.R. 221, 234 (B .A.P. 6th Ci r. 2005) (“The bankruptc y court’s finding that the Debtor met the good faith prong of the Br un ne r te st i s a lso n o t cl ea rl y erro n eo u s
. ”)

. T h e Ni n t h C i rc u i t Ba n krup t cy Ap p el l at e P an el h as d el v ed i n t o t h e p ro n gb y -p ro n g s t an d ar d o f re v i ew qu es t i o n an d s t at ed an o t h er p o s i t i o n : “[ T ] h e t h re e i n d ep en d en tp ro n gs are [] mix ed questions” of law and fac t “ requiring de novo revie w” on a ppeal. Ro th v . E

du c . Cr e dit Mgmt. Corp. (

In reRo th ), 490 B .R. 908, 916 (B.A .P. 9th C ir. 2 0 1 3 ). I n t his case, the distinction betwee n these standa

rds of re view make s no differ ence as to the re sult. 3 Dischar g eability

deter minations, such as whether student loans pose an undue hardship, ar e
co nclusions of law re viewed de novo. Cheesman v . TennesseeStudent Assistance Corp. ( In re 1 Cheesman ), 25 F .3 d 3 56 , 3 59 (6 th C ir . 1 99 4) ; Hogan v. Ge orge ( In re Ge orge ), 485 B.R. 478, 2013 WL13 52 74 , at *1 (B .A .P. 6th Cir . 2 01 3) (t a

ble ). Un de r a de no vo sta

nd ard of re vie w, the a

pp e llate

co u rt d et erm i n es t h e l aw at i s s u e “ ‘i n d ep e n d e n t l y o f, an d wi t h o u td ef

er en ce t o , t h e t ri al co u rt 's deter mination.’ ” Palmer v. W ashington Mut. Bank

( In re Ri tc hie ), 41 6 B .R. 63 8, 64 1 (B .A .P. 6th C i r. 2 0 0 9 ) ( qu o t i n g Ge n. El e c . Cr e dit Eq uit ie s, In c . v. Br ic e Rd

. D e v s. , L. L.C. (

In re BriceRd. De v s. , L. L.C. ), 392 B .R. 274, 278 ( B.A .P. 6th Cir. 2008)). H oweve r, “[t] he Panel must aff irm the underlying f

actua l determinations unless th ey ar e cl ea rly err oneous.” Hart v. Molino ( In re Molino ), 2 2 5 B. R. 904, 906 (B.A .P. 6th C ir. 1998). “[A] finding is clea rly err oneous whe n althoug h there is evidence to suppor t it, the revie wing court on the entire evidenc e is left with the definite a nd firm conviction that a mistake has b een committed.” Anderson v. City of Besse mer City , 470 U.S. 564, 573, 105 S. Ct. 1504, 1511 (1985) (citation omitted) (interna l quotation marks omitted). “I f two views of the evidenc e in a case are permissible, the choice betwee n those views made by the fa ct finder

is not clearly

err oneous.” Mi c hig

an v . Ci ty of A lle n P ar

k , 954 F.2d 1201, 1 2 1 3 (6 t h C i r. 1 9 9 2 ) ( ci t i n g United States v. Y ellow Cab Co. , 338 U.S. 338, 342, 70 S. Ct . 177, 179 (1949))

.

F AC TS

The De btor, a fif

ty -f i v e y ear old single w oman, filed a voluntary

chapte r 7 bankr

uptcy petition on J une 15, 2012. I n Schedule F of her petition, the Debtor listed debts of $129,518.91 f orThere is s o me d is c r e p an c y in th e f il in g s a s to w h e th e r

th is a mo u n t i s c o r

r e c t. T h e e xa ct 2 amount is imm ater ial to the resolution of this appea l.
The Rec ord on Appeal does not contain a transcr ipt of the trial. Acc ording to the Debtor’ s 3 Reply Br ief, she “ could not aff ord the $698.00 re quired for transcr ipts of the Trial.” A ppellant’s Reply Br . at 10, Marc h 3, 2014, ECF No. 23.
As un de rs too d b y

the Sixth C ir c uit

Court of Ap pe a ls: 4 The Income Conting ent Repay ment Prog ram pe rmits a student loan debtor to pay tw e nty pe rc e nt o f t

he dif fe re nc e be tw e e n h is a dju ste d g ro ss i nc ome and the po ve rt

y le ve l f or his fa mil y size , o r t he amou nt t he de bto r w ou ld pa

y if the de bt w e re re pa id in twe lve y e ars , w hic he ve r i s le ss. Un de r t he pr og ra m, t he bo rr ow e r’ s mo nth ly repa y ment amount is adjusted eac h y ear to ref lect any chang es i n these factors. The borrowe r’s re pay

ments may

also be a djusted during the y ear based on spe cial circ umstances. See 34 C.F.R. § 685. 2 0 9(c) (3). At the e nd of the twe nty five y ear pay ment period, a

ny rema ining loan ba lance would be ca ncelled by

the Secr etar

y of Education. However , the amount dischar g ed would be c onsidered tax able income

. 4 e du c a tio na l lo ans
. The De btor i n cu rr ed these loans (the “ Student L oans”) , while attendingthe 2 University

of Akron be tween 1988 a nd 1996, from t h e Un i ted States Depa rtment of Educ ation (“U SDOE”) a

nd the Univer sity of Akron (collec tively , the “Creditors”). The Student L oans have been in de fault since 1996.

On Octobe r 3, 2012, the De btor, pro se, initiated the un d er l y i n g adver sary proce eding

a g a ins t th e Cr e dit or s r e qu e sti ngan un du e ha rd sh ip d isc ha

rg e of the Stu de nt L oa

ns un de r 1 1 U .S. C. § 523(a) (8). The Creditors answe red the Debtor’ s complaint, and the pa rties completed discove ry and stipulated to the admissibilit y of employ

ment and medica l rec ords submitted b y t h e De btor. Prior to trial, the Debtor submitted a le ng thy Proposed Finding s of Fa ct and Conclusions of L aw, in which she de scribed a

his to r y o f me d ic al problems and unsuc cessf ul educational and profe ssional endea vors. The Creditors submitt ed several ex hibits of t heir own. The c ase w ent to trial on May 20 , 2 01 3. At

the tr ia l, t

he B ank ru ptc y Court he ard te sti mony

fr om t he Deb to r’ s mo the r, B e tty Da ug he rt y , a nd the De bto r’ s so n, Da

nie l T ru de l. 3

The USDOE a

nd the Debtor

also filed post-trial brie fs that addr essed the D ebtor’s obligations under the USDOE’ s I ncome Co ntinge nt Repay ment Prog ram (the “I CRP ”). The 4Tirch v. Pa. High er E d u c. A s s istance Agenc

y ( In re Tirch ), 409 F .3d 677, 682 (6th Cir. 2005) (q u o t i n g Korhonen v. Educ . Credit Mgmt. Corp. ( In re Korhonen ), 296 B .R. 492, 496 (Ba nkr. D. Minn. 2003)). 5 USDOE cla imed that the Debtor ’s m edica l co-pa y s could be c onsidered in c omputing her require d monthly pay ments if she we re to e nter into the I CRP . Post-Tri al Br i ef of the United States of Am e ri c a , Jun e 11 , 201 3, ECF No . 24, a t 7. Th e De bto r re sp on de d that her monthl y I CRP p ay me nts would amount to $53.00 or less. She arr ived at this figur e using her sa lary from a thirty -two hour

wo rk we e k. She a lso c on te nd e d that he r me dic a l c o- pa y s mig ht no t be take n into a c c ount s ho uld sh e e nr oll

.

On Oc tob e r 2 8, 20 13 , the Ban krup tc y Cou rt iss ue d a Me mor and

um O pin ion

in whic h it deter mined that the Debtor

was not entitl ed t o a discha rg e of he r educ ational loans. The B ank ru ptc y Court fi rs t li ste d a

numbe r o f f

ind ing s o f f

a c t, a s f oll ow s:
1. Plaintiff-debtor, throug h counsel, filed a voluntary chapte r 7 bankruptc y petition on J une 15, 2012.
2. On her Schedule E - Creditors Holding Unsec ured Priority Claims, plainti ff- debtor lis ts $ 24 ,0 00 in ta xes. On he r S c he du le F - C re dit or s H old ingUn se c ur e d N on pr ior ity C l aim s, plaintiff-debtor

lists $248,059.16, i ncluding $129,518.91 for e ducational loa ns . De bto r doe s not list

any re a l pr op e rt

y on he r S c he du le A a

nd no se c ur e d d e bts on her Sche dule D.
3. Plaintiff-debtor is o b l i g ated to the USDOE for e ducational oblig ations in an amount betwee n $106,595.88 and $130,000.00. Pla int if f- de bto r i s a lso ob lig a te d to the Univer sity

of Akron f

o r e d u c a ti o n a l o b li g ations in an amount betwe en $13,000.00 and $24,352.54. (The oblig ations to the USDOE and the University of Akron will be collectively

ref err ed to as the “ Student L oans”)

. The S tudent L oans were incurred by plaintiff-de btor in attending the University of Akron. Plaintiff- debtor did not rec eive a deg ree from the Unive rsity of Akron.
4. Plaintiff-debtor has never made a ny voluntary pay ments on her Student L oans. The on ly pa y me nts re c e ive d by the Un ite d State s c a me fr om inc ome ta x re fu nd int e rc e pts

. 5. Pla int if f- de bto r i s 5 4 y e ars old and e mpl oy e d a s a

Cr e dit /Me rc ha nd ise Spe c ia lis t for Sterling , I nc. (“ Sterling” ).6

6. Pla int if f- de bto r h a s n o d e pe nd e nts

. 7. Plaintiff-debtor is paid $12.65 per hour plus ove rtime, when applicable. Plaintiffdebtor e arne d $19,680.08 from Sterling in 2012.
8. Plaintiff-debtor lives in a r ented r esidenc e and res i d es t h ere with her son and mother. On he r Amende d Schedule J - Curre nt Ex penditures of I ndividual Debtor(s) , pla int if f- de bto r r e po rt s $ 60 0. 00 fo r m on thl y re nt. 9. Duringtrial plaintiff-de btor’s mother testified that monthly rent for their re sidence was $750.00 a

nd that she contributes to the rent in an unspec ified amount. Plaintiffde bto r’ s so n te sti fi e d th a t he a lso c on tr ibute s $ 40 0 p e r m on th i n r e nt. M r. T ru de ll [sic ] al so te sti fi e d that it wa s his int e nti on to mov e fr om O hio so the re is a po ssi bil ity that his contribution to rent will not continue in the future.
10 . Pl a int if

f-d e bto r s uf

fe rs fr om s e ve ra l me dic a l c on dit ion s in c lud ingc hr on ic bronchitis and the beg inning stag es of e mphy sema. Plaintiff-de btor also suffe rs from chronic neck a

nd back pa in.
11 . In th e op ini on

of he r t re ati ng ph y sic ian, pla int if f- de bto r i s n ot p e rm ane ntl y d i s a b l e d , i s a b l e t o p e r f o r m h e r j o b f u n c t i o n s a tS t e r l i n g , i s c a

p a b l e o f w o r k i n g 4 d ays a we ek for

8 hours ea ch day

and will not be incapa citated f or a sing le continuous period of time due to her medic al condition, including a ny t i m e for treatment and rec overy . USDOE Ex. C and D. 12. The treating phy sician also opined t hat i t will be medically nece ssaryfor plaintiffdebtor to be a

bsent from wor

k during “fla

re- ups” in her me dical condition, that such “fla re- ups” would likely occur one time e very six months a nd would last for 3 to 4 da y s p e r e pis od e . U SDO E E x. C. 13. Despite suff

eringfrom ch ro n ic bronc hitis and the beg inning stag es of e mphy se ma , p la int if

f- de bto r s til l oc c a sio na lly smo ke s c ig are tte s. 14 . T he Un ite d Stat e s off

e re d p la int if

f- de bto r a dis c ha rg e fr om t he on e tim e inc ome ta x re spon sib ili ty

ari sin g fr om a

loa n f or g ive ne ss a

t th e c on c lus ion

of an I CRP. Plaintiff-debtor refuse d this offe r and chose not to participate in an I CRP beca use of her c oncer

n that enrolling in the p ro g ram c ould impair her a bility to obtain future c re dit

. Mem. Op. at 4-6, Trudel v. United States Dep’ t of Educ . Adv Pr oc . No. 12 -0 52 69 (B ank r. N. D. Oh io October 28, 2013), ECF N o. 29 (footnotes omitted). The same day , the Bankruptcy Court entere d a judg ment finding that the Debtor was not entitled to an undue hardship discha rg e.7

The B ankruptc y

Court did not make any

finding of fa ct as to whether the Debtor would be able to ea rn a hig her inc ome in the future . Acc ording to the Ba nkruptcy Court, “[t] here was no
e vid e nc e a t tr ia l r e g ard ingwh e the r any mor e luc rativ e e mpl oy me nt o pp or

tun iti e s w e re a va ila

ble to plaintiff-de btor at Sterling or whe ther, in her curr ent position, pl aintiff-de btor could expect to ea rn more than he r cur

rent hourly

rate .” Mem. Op. at 10, ECF No. 29. Similarly , the B ankruptc y Court

ma de no fi nd ingof

fa c t a s to wh a t th e De bto r w ou ld h a ve to p ay e ve ry month we re sh e to enro ll i n the I CRP . The B ankruptc y Court describe d the issue of the De b t o r’s mont hly I CRP pay

ments as fo llo ws :

Duri ngc los ingargume nts , p la int if f- de bto r a sse rt e d th a t sh e wo uld be obli g a te d to pay at least $54 pe r month under the I CRP . Given that such a ssertion was not su pp or te d b y any e vid e nc e , the Court

le ft the re c or d o pe n to a llo w a ll p art ie s to fi le post-trial brief

s to address the issue . . . . I n her post-tria l pleading plaintiff-debtor ref ere nces he r E x h i b i t 2 0 as evide nce of an oblig ation to pay

$54 per month. That document consists of 6 pag es of what appea r to be plaintiff-de btor’s calc ulations of what she mig ht have to pay under various repa y ment prog rams off

ere d by the United States. No direc t testimony on this exhibi t was offere d at trial and the Court does not find it probative on the matter of what, if any thing, plaintiff- debtor would be ob lig a te d to pa

y un de r t he I CRP. Mem. Op. at 12 n.4, ECF No. 29.

Af te r s e tti ngfo rt h it s fi nd ing s o f f a c t, t he B ank ru ptc y Court dis c us se d th e un du e ha

rd sh ip sta nd ard fo r t he dis c ha rg e of stu de nt l oa

ns and a pp lie d th e thr ee-p art Br un ne r test to the Debtor’ s
case . Under

the Br un ne r test, a debtor must prove three elements in or der to qua lify for a n undue hardship discha

rg e of e ducational loans. Brunner v. New York State H igher Educ. Se rv. Corp. , 831 F .2 d 3 95 , 3 96 (2 d Ci r. 19 87 ). Th e B ank ru ptc y Court c on c lud e d that th e De bto r h a d n ot s a tis fi e d a ll t h re e p ro n gs o f t h e t es t

. T h e c o u rt fo u n d s h e h ads at i s fi edt h e f

i rs t“m i n i m al s t a n d ar d

o f l i v i n g” prongbut had fa iled to satisfy th e s ec o n d “additional cir cumstance s” and the third “g ood faith” prong s of the Br un ne r test. The De btor filed a timely Notice of Appea l on November

8, 2013.8 DI SCU SSIO N

The B ankruptc y

Code is espec ially

exacting w ith reg ard to the r epay ment of student loans made, insure d, or guara

nteed by a g overnm en t al unit. Section 523(a)( 8) of the B ankruptc y Code

m akes suc h student loan debt nondischar g eable in bankruptcy , unless excepting the debt from dis c ha rg e “ wo uld imp os e an und ue ha rd sh ip o n th e de bto r a

nd the de bto r’ s d e pe nd e nts [.]” 11 U. S.C. § 523(a) (8).

The B ankruptc y

Code does not def

ine pre cisely what “undue hardship” me ans. Instead, the

case law h as d ev eloped tests that provide that definition. The test employ ed by the majority

of courts, including t he S ix th Circuit, is the Br un ne r test. See Oyler v . Educ. Credit Mgmt. Corp. ( In re Oy ler ), 3 9 7 F. 3 d 3 8 2 , 3 8 5 (6 t h C i r. 2 0 0 5 ) ( ad o p t i n g Br un ne r test in the Six th Circuit). Under the Br un ner te s t, a

d e b to r mu s t p r o v e th e f

o ll o w in g thr e e e le me n ts in o r d e r to qu a li f y f o r anu n d ue ha rd sh ip d isc ha

rg e of e du c a tio na l lo ans :
(1) th a t th e d e b to r c an n o t ma in ta in , b a s e d o n c u r r e n t in c o me an d e xp e nses, a “minimal” standar d of l i v i n g for he rself a nd her de pendents if f

orce d to repa

y the loa ns ; ( 2) tha

t a dd iti on a l c ir c ums tanc e s e xist indi cat in g t hat th is s tate of a ff a ir s is lik e ly to p e rs ist fo r a sig nif ic ant p or tio n o f t he re pa y me nt pe ri od of

the stu de nt l oa

ns ; and (3) that the debtor ha s made g ood faith ef forts to repa

y the loans.
Brunner , 8 31 F .2 d at 39 6. “ I t is the de bto r’ s b ur de n to e sta bli shthe e xiste nc e of

e a c h o f t he se elements by

a pre pondera

nce of the evidenc e.” Grant v. United States De p’t of Educ. (

In re Grant

), 3 9 8 B. R

. 2 0 5 , 2 0 9 (B an kr. N. D. Oh i o 2 0 0 8 ) ( ci t i n g Pa . H igh e r E du c . A ssi sta nc e Age ncy v. F

ais h ( In re Fa ish ), 72 F .3d 298, 306 (3d Cir. 1996)).

Ne ith e r p art

y ha s cha lle ng e d the B ank ru ptc y Court ’s fi nd ingthat th e De bto r s a tis fi e d th e fi rs t p ro n g of the Br un ne r test. Acc ording ly , the Panel will focus on the se cond, “a dditional circ umstances,” and the third, “ g ood faith” pr ong s.9

a. Additional C ircumstances

Under the sec ond prongof the Br un ne r test, a debtor who has prove n that s he ca nnot maintain a minimal standa rd of living if forc ed to r epay her student loans must show “that additional circ umstances e x ist indi catingthat this state of aff airs is likely to pe rsist .

. . .” Brunner , 831 F.2d at 396. Such additional circ umstances “ may include, but ar e not limited to, ‘ill ness, disability , a lac k of usea ble job skills, or the ex istence of a lar g e number

of depe ndents.’ ” Ba rre tt v . E du c . Cr e dit Mgmt. Corp. (

In reBa rre tt), 4 8 7 F. 3 d 3 5 3 , 3 5 9 (6 t h C i r. 2 0 0 7 ) ( ci t i n g Oy le r v . E du c . Cr e dit

Mg mt

. Corp. , 397 F.3d 382, 385 ( 6th Cir. 2005)). The circ umstances at issue must have such a da mag ing impact on the debtor ’s ea rning capa city

or financ ial condition that they indicate a

“ce rtainty

of hopelessness, not mere ly a present inability to fulfill financial c ommitm ent.” Oyler , 397 F.3d at 386 (q u o t i n g In re Robe rson , 999 F.2d 1132, 1136 ( 7th Cir. 1993)).

A d e bto r c la imi ngthat a me dica l c on dit ion

ind ic a te s a

“ c e rt a int y of ho pe le ssn e ss” mus t

“ pr e c ise ly ide nti fy he r p ro ble ms a

nd e xpla in h ow

he r c on dit ion wo uld imp a ir he r a bil ity to w or

k in the future .” Tirch v. Pa. Higher Educ . Assistance Agenc y ( In re Tirch ), 409 F .3d 677, 681 (6th Cir. 2005). “[ T]he mere exis tence of a medical condition, no matter the sever ity , is insufficient to for m the basis of [an] undue hardship di schar g e. I nstead, a strong nexus betwee n the medica l condition

and its a dv e rs e e ffect on the de bto r’ s te rm s o f e mpl oy me nt ( sp e c if

ic a lly , a de bto r’ s in c ome ) m

us t be shown.” Morrow v. U.S. De p’t of Educ. (

In re M orrow ), 36 6 B. R. 7 74 , 7 78 (B ank r. N. D. Oh io 2 0 0 7 ) ( ci t i n g Swinney v. Ac ademic F in. Servs. (

In re Swinney ), 26 6 B .R. 80 0, 80 5 ( B ank r. N. D. Oh io 2001). F urthermor e, while corr oborating expert testimony is not necessa rily require d, Ba rre tt , 487 F.3d at 361, a debtor must still pr ovide probative evidenc e as to the nexus betwe en her c ondition and her ina bility to ear n enoug h income to pay

off he r loan:

To e sta bli sha ne xus, me re sp e c ulatio n w ill no t su ff ic e ; f or e ve ryon e , th e re e xists a possibili ty

that a medica l condition will arise that will adverse ly aff ect a person’ s terms of e mploy

ment. Rather, a debtor must c ome forth with evidence showing that the y pr e se ntl y have a me dic a l c on dit ion su ff

ic ie ntl y de bil itatin g to a ff

e c t th e ir a bil ity to maintain employ

ment, and that such a

condition is unli kely

to improve.10

Lowev . E CM

C ( In re Lowe ), 321 B .R. 852, 859 (Ba nkr. N.D. O hio 2 0 0 4 ) (i n t er n al citations omitted).

The De btor failed to pe rsuade the Ba nkruptcy Court that he r medical conditions w ere sever e enoug h to satisfy the “additional circ umstances” p ro n g o f t he Br un ne r test. Acc ording to the Ba nkruptcy Court, “t h e evide nce pr esente d at trial demonstrates that [the Debtor’s medic al conditions] do not preve nt her f rom perf orming her job func tions at St erling .” Mem. Op. a t 9, ECF No . 2 9. Th e Court

e xpla ine d it s v ie w o f t

he De bto r’ s me dic a l c on dit ion a s f oll ow s:

Plaintiff-debtor’ s evidenc e g oes to support her subje ctive lay opinion that she suffer s from medica l conditions th at i m p ai r her a bility to work. Howe ver, suc h evidenc e must be weig hted ag ains t t he opinion of the plaintiff- debtor’s tre ating phy sician wh ic h c on c lud e s that pla int if f- de bto r’ s me dic a l c on dit ion s do no t imp a ir he r a bil ity to work, see USDOE Ex. C and D. I n so doing, the Court cannot find that plaintiffdebtor’s e vidence outweig hs that of her treating phy sician. Mem. Op. a t 10 , E CF No . 2 9. No tin g an a bs e nc e of e vid e nc e re g ard ingwh e the r t he De bto r c ou ld obtain more lucr ative employ ment, the Ba

nkruptcy Court w ent on to state that “[w]hi le it is true that pla int if f- de bto r’ s p re se nt i nc ome is i ns uf fi c ie nt t o en a

ble he r t o p ay

the Stu de nt L oa

ns and sti ll

ma int a in a

min ima l st and ard

of liv ing , th e Court

ha s n ot b e e n p resented

wi th e no ug h e vid e nc e to

war rant findinga ‘c erta inty

of hopele ssness.’ ” Me m. Op. at 10, ECF No. 29.

The De btor takes issue with the B ankruptc y Co u rt ’s fa ctual findingthat her me dical conditions do not pre vent her from wor king. A ccor ding to the D ebtor, the B ankruptc y Court ga ve
e xce ssi ve we ig ht t o e vid e nc e that su pp or te d th e c on c lus ion

that sh e c ou ld w or

k, wh ile fa ili ngto consider e vidence that support ed the opposite conc lusion. A review of the re cord, how ever , indicates that the B ankruptc y Court did not commit clea r er ror in findingas it did.

The e vidence cited by

the B ankruptc y

Court consists of two e x hibits filed by the USDOE. One is a U.S. D epar

tment of L abor form entitled “Certific ation of Hea lth Car e P ro v i d er for Employ ee’ s Serious Hea lth Condi tion Family and Medic al L eave Act,” dated J an u ar y 30, 2013. USDOE Ex. C , Dec . 18, 2013, ECF NO. 43- 1. The other is a Sterling Jewelers, Inc. for m entitled11

“AttendingPhy sician’s Statement Workplace Restrictions/Accommodations” (the “Statement of Workplace Restric tions”), also date d J anuar y 30, 2013. USDOE Ex

. D, Dec. 18, 2013, ECF No. 43- 1. I n both of these doc uments, doctors treating the Debtor state that the Debtor c an wor k for e ight hours a da

y , four da

y s a we ek

. The Statement of Workplac e Restrictions desc ribes the wor k restric tion as temporar

y , to last until May

15, 2013.

Th e De btor argues that th e B ank ru ptc y Cou rt ov e rl oo ke d o the r e vid e nc e that, s he c la ims , su pp or ts the c on c lus ion t hat he r m e dic a l c on dit ion s im pa ir he r a bil ity to w or k a nd c on sti tut e “additional circ umstance s ” u n der Brunner . T he De bto r c ite s ( 1) va ri ou s me dic a l r e c or ds and te st

r e s u l t s d e s c r i b i n g t h e s e v e r i t y an d d e g e n e r a t i v e n a tu r e o f h e r c o n d i t i o n s ; ( 2 ) a c o l l e c t i o no f h e r p aystu bs datin g fr om b e tw e e n D e c e mbe r 2 01 2 a nd Ma rc h 2 01 3 th a t a lle g e dly

sh owhe r f

a ili ngto

ma int a in a thi rt

y -t wo ho ur wo rk

we e k d ue to h e r m e dic a l c on dit ion s; a nd (3 ) a “ Sy mpt om Journ a l” datin g fr om b e tw e e n N ov e mber 20 12 and Ap ri l 20 13 in whic h th e De bto r r e c or de d h e r d a ily incidents of pain a

nd stress, including those instances when pain a nd stress forc ed her to lea

ve wor k. These doc uments do not undercut the e vidence relied upon by the B ankruptc y

Court. The medica l

rec ords and test re sults cited by the Debtor

contain a w ealth of infor

mation reg arding the nature and

sever ity of her ailments, but none contain stateme nts co n t ra d icting or differ ing f

rom the medica l

o p i n i o nc o n t a i n e d

i nt h e U S D O E ’ s e x h i b i t s : t h a t t h e d e b t o r c an w o r k , a l b e i t w i t h a

t e mp o r ar y t h i rt ytwo hour we ek re striction. As for the pa y -stub collection and Sy

mptom Journal, the se exhibi ts might support a findingthat the Debtor ’s conditions impaired her ability to work, but neither c ontains the opinion of a medica l professional a nd are n o t en t itled to more weig ht than the USDOE’s doc torprepa red e x hibits. Given it s discretion as the fac t-finder , the B ankruptc y Court did not clearly

err when it re lied upon the USDOE’s exhibi ts to find that the D ebtor’s c onditions di d not preve nt her from wor king. Se e Mi c hig

an v
. City of A lle n P ar

k , 954 F.2d 1201, 1213 ( 6th Cir. 1992) (“I f two views of the e vidence in a ca se ar e per missibl e, the c hoice be tween thos e v i ews made by the fa ct finder is not cle arly

err oneous.”)

.12

The Debtor also disputes the Bankruptcy Court’s finding that there was no e vidence that her conditions preclude d her from obtaining more l ucrative employ ment. She claims that the facts of her me dical condition, ag e, educational attainment, a nd work history

constitute just such evidence

. Ac c or din g to t

he De bto r, the se fa c ts su

pp or t the c on c lus ion

that he r “ futur e e mpl oy

me nt p ro sp e c ts

are limit ed and a dvance ment highly unlikely .” Appe llant’s Br . at 20, ECF No. 15.

The B ankr uptcy

Court’s view of the evidenc e on this issue was not mistaken. The r ecor d does not contain doc uments or testimony relating to whe ther or not the D ebtor c ould ear n a hig her salary at Sterling or some other employ er. The Debtor did not prese nt evidence , for e x ample, that her he alt h, ag e, or e ducational attainment level pre cluded he r fr om advanc ing w ithin S terling or obtaining e mploy

ment elsewhe re. Student-loan de btors may prese nt such evi d en ce i n undue hardship ca ses, allowing courts to make f indings a s to the limi ts of a debtor ’s ea rning potential. See, e.g. , Nixon v . K

ey Educ. Re

s. ( In re Nixon ), 453 B .R. 311, 321 (Ba nkr. S.D. Ohio 2011) (“ The hig he st s a lary

[de bto r] c ou ld p os sib ly

e arn g ive n h is e du c atio na l ba c kg ro un d and e xpe ri e nc e wo uld be as a li brar ian .

. . making approximately $40,000 annually .”); Lebovits v. Chase Manhattan Bank ( In re Le bo v its ), 22 3 B .R. 26 5, 26 9 ( B ank r. E. D. N. Y. 19 98 ) ( statin g that de bto r “ is c ur re ntl y commanding the hig hest salar y that he ca

n expect to ear

n” and that debtor “has no ex pectations of pay raises other t han cost-of-living adjustments”). Thoug h the Debtor prese nted evidenc e of he r ag e, backg round , an d h ealth conditions , she did not prese nt evidence that explained how her circ umstances a ffe cted he r ea rning potential.

To pro v e “ a d d it io n a l c ir c u ms ta n c e s , ” th e D e b to r

h a d to e s ta b li s hth a t h e r

me d ic a l i ssues prec luded her

from improving her f

inan cial condition. Instead, the e vidence showed that he r conditions allowed her

to continue working , albeit at a te mporaril y re d u ced schedule. A nd no evidenc e wa s prese nted re g ardingher pote ntial future income . There fore , the Panel agr ees w ith the Ba nkruptcy Court’s conclusion that the De btor failed the “a d ditional circumstance s” prongof the Br un ne r te st.13

b. Go od

Fa ith
The third prongof the Br un ne r test require s that the debtor show that she has made a g ood faith effo rt t o re p ay h er student loans. Brunner , 831 F.2d at 396. “ Go od fa ith , in thi s c on te xt, is essentially

an inquiry

into whether the debtor ha s consciously or irre sponsibly

disreg arde d his or her repa y ment obligation—or, instead, whethe r there is some justi fication f or the de btor’s def

ault and ong oing ina

bility to repa y the loan.” Crawl ey v . Educ. Credit Mgmt. Corp. ( In r e Crawley ), 460 B.R. 421, 444 (B ankr. E.D. Pa. 2011). Courts consider a number of f

actor s to determine g ood faith, including the debtor’s repay ment history and her eff

orts to obtain employ

ment, maxi miz e income, min imi ze e xpe ns e s, and

pa rt ic ipate in a lte rn a tiv e re pa y me nt p ro g ra

ms, tho ug h n o s ing le fa c tor is dispositi ve. See, e .g. , Benjume n v. AES/Charter Bank ( In re Be njumen ), 408 B .R. 9, 21- 22 (B ankr. E.D. N.Y. 2009)

. See also He rtzel v. Educ. Credit Mgmt. Corp. ( In re He rtzel), 329 B .R. 221, 233-34 (B

. A. P

. 6 t h C i r. 2 0 0 5 ) ( qu o t i n g Nor a s t eh v. Dept. of Educ. ( In re Norasteh ), 311 B .R. 671, 676 (B ankr. S.D.N.Y . 2004)).

“[I ]nherent in any

g ood-fa ith analy si s u n d er the third prong of the Brunner test is whether and the e x tent to which the debtor actually made any voluntary pay ments on the obl iga

tion.” Grant , 3 9 8 B. R

. at 2 1 3 (c i t i n g Morrow v. U.S. De p’t of Educ. (

In re M orrow ), 366 B.R. 774, 779 (B ankr. N. D. Oh io 2 00 7) ). Simi larl y , p art ic ipatio n in an in c ome se ns iti ve re pa

y me nt p ro gr a

m , l i k e the I CRP, is “probative of

[t he debtor ’s] int ent to repa y her loa ns.” Tirch , 409 F.3d at 682.

De bto rs wh o f

a il t o ma ke v ol un tary

pa y me nts or e nr oll in a

re pa y me nt p ro g ra

m c an s til l prove go o d faith. To do so, howe ver, the y need a probative e x planation for the ir behavior. For example, courts have excused the fa ilure to make voluntary pay ments if a debtor has applied f or or obtained def

erme nts to avoid default. See B arrett v. Educ. Credit Mgmt. Corp. ( In reBa rre tt), 487 F.3d 353, 365- 66 (6t h C ir. 2007) (de btor obtained de fer ments). Se e als o Ce k

ic -T orre s v . A c c ess Grove , Inc. ( In re Cek ic-Torres ), 431 B .R. 785, 795 (Ba nkr. N.D. O hio 2 0 1 0 ) (debtor obta ined a de fe rm e nt a

nd a tte mpt e d to ob ta in a

n exte ns ion of the de fe rm e nt, but wa s den ie d) . L ike wi se , c ourt s have e x cused the failure to enroll in a re pay ment prog ram in a numbe r of sc enar ios. I n Ba rre tt , the Court of Appea ls ex cused the debtor’s non- enrollment base d on the debtor’ s expl anation that14

enrolling in the I CRP could potentially result in bur densome tax liability upon the conc lusion of the pr og ra m. 487 F.3d at 365. I n Hertzel , t h i s c o u rt e xc u s e d a d e b t o r ’ s f a i l u r e t o e n r o ll i n th e I CRP wher e the de btor “wa s told she could not qualify

. . . beca use her loans wer e in def

ault” and “ [d] ebtor was not g iven any

assistance or information on how to make h er s el f el igible f or the prog ram.” 329 B.R. at 234.

None of these e x planations in the above case s are applicable to the Debtor. The Debtor ha s g one almost two dec ades w ithout obtaining or applying for deferme nts. Tax liability should be no

conce rn to her: the U SDOE has off ere d her a discharg e of any tax l iability that may arise at the end of the re pay

ment prog ram. Her rationale for ref using to pa

rticipate in the I CRP is that it would harm her a bility to obtain cre dit, but thi s excuse is “ insufficient for reje cting a prog ram that would allow [t he De btor] to fulfill her loa n obligations in a more rea sonable and manag eable way .” Robinson v. Educ. Credit Mgmt. Corp. ( In re Robinson ), 416 B .R. 275, 282 (Ba nkr. E.D. Va . 2009).

The De btor cites ca ses in which cour ts r efuse d to f

orce debtors into repa

y ment prog rams on the g ro un ds that par

tic ipatio n wou ld be futil e or me anin g le ss. I nd e e d, in a num be r o f c a se s, c ourt s conclude d that the debtor’ s circumst an ces were so desper ate that pa rticipation in a re pay

ment prog ram would fa il to result in “any meaning ful repa

y ment of the de bt.” Ba las k i v. Educ. Cred

it Mgmt. Corp. (

In re Balaski ), 280 B .R. 395, 400 (Ba nkr. N.D. O hio 2002). See also, e .g. , Roth v. Educ. Credit Mgmt. Corp. ( In re Roth) , 490 B.R. 908, 919-20 ( B.A .P. 9 t h C i r. 2 0 13) (“ Given [debtor’s month ly

p la np a y me n t o f ze r o , an d

li k e li h o o d

th a t p ay me n t w o u ld

n e v e r in c r e a s e ], we conclude that [d] ebtor’s r efusa l to participate in the I BRP should not be weig hed ag ainst her

. . . .”). But i nth e s e c a s e s , c o u rts d e c id in g th e g o o d f a it hqu e s ti o nh a d

a lr e a dy c o n c lu d e d

th a t t h e d ebtors had satis fi ed the sec ond “additional cir cumstance s” prongof the Brunner test; the debtors had proven that their circ umstances we re hig hly unlikely to ev er improve. This case prese nts the opposite scena

rio: The Debtor has fa iled the sec ond Brunner prongand thus, at lea st in the view of the B ankruptc y

Code as interpr eted in this circuit, she c an still hop e fo r i m proved inc ome and meaning ful repa

y ment in the future.Th e De bto r a lso c omp la ins tha t th e B ank

ru ptc y Cou rt e rr e d w he n it

stated that he r I CRP 5 calc ulations, contained in her Ex hibit 20, wer e not probative of what her pay ments would be if she we re to e nr oll in t

he pr og ra m. It is un c le ar b a se d o n th e re c or d whet her Exhi bit 20 wa s a c tua lly admitted, beca

use the De btor did not provide a trial transcr ipt, but, reg ardle ss, it does not assist t he Debtor. Exhi bit

20 cons i s t s o f som e notes by the Debtor

and scr een shots of the repa y ment plan ca l cu l at o rs l o ca t edat t h e go v e r n m e n ts tu d e n ta i d

w e b s i t e
. ( h t t

p : // s tu d e n t a i d

. g o v /r e p ayloans/understand/plans)

. The Ba nkruptcy Court c onsidered this evide nce a nd found it not probative. Admissio n s o f

e v id e n c e an d

d e te r mi n a ti o n s o f

r e le v an c y

ar e r e v ie w e d

f o r ana b u s e o f d is c r e tion

. United States v. Phillips , 888 F.2d 38, 40- 41 (6th Cir.19 8 9). I n o rd e r f or a futur e monthl y

I CRP pay ment calc ulation t o be ac curate, there must first be an ac curate deter mination of the Debtor’ s inc ome g oin g fo rw ard . U nf or tun a te ly , th is f

ir st s te p d id n ot o c c ur. Th e De bto r b a se d h e r I CRP calc ulations on income from a thi rty -two hour work week that at least one of her doctors desc ribed a s a te mpo ra ry re str ic tio n. Th e Court

ha d a lr e a dy

c on c lud e d in

its “ a dd iti on a l circ ums tanc e s” ana ly sis that th e De bto r m ig ht imp ro ve he r fi na nc ia l c on dit ion in the futur e
. Gi ve n th e un c e rt a int y a bo ut h e r i nc ome g oin g fo rw ard , the B ank ru ptc y Cou rt ’s state me nt w ithre g ard

to t he De bto r’ s I CRP calc ulations was not clea

r er ror or an abuse of discre tion.

15 Given the De btor’s fa ilure to make voluntar y pay m en t s , en ro l l in the I CRP , or satisfy the additional circ umstances prong o f t he Brunner test, the Panel will aff

irm the Ba

nkruptcy Court’s conclusion that the De btor failed to pr ove that she ma de a g ood faith ef fort to re pay

her student loa ns
. 5

CO NC LU SION

Ba sed on the for eg oing, Pane l AFF I RMS t he B ankruptc y Court’s judgme nt and orde r deter mining the De btor’s student loans to be non-disc harg eable

.