* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not

be published and is not precedent except under the limited circumstances set forth in 5TH CIR.

R. 47.5.4.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 07-40991

Summary Calendar

In the Matter Of: DANNY MICHAEL OSTROM

------------------------------------------------------------------------------------------------------

DANNY MICHAEL OSTROM,

Appellant-Cross Appellee

v.

EDUCATIONAL CREDIT MANAGEMENT CORP.,

Appellee- Cross Appellant

Appeal from the United States District Court 

for the Eastern District of Texas

U.S.D.C. No. 4:06-CV-163

Before REAVLEY, JOLLY, and DENNIS, Circuit Judges.

PER CURIAM:*

This appeal arises out of Appellant-Cross Appellee Danny Michael

Ostrom’s (“Ostrom”) attempts to discharge his student-loan debt through a

bankruptcy proceeding. The bankruptcy court conducted an adversarial hearing

on the matter and denied Ostrom’s petition to discharge the debt based on a

factual finding that Ostrom had not demonstrated undue hardship as required

United States Court of Appeals

Fifth Circuit

F I L E D

June 26, 2008

Charles R. Fulbruge III

Clerk
No. 07-40991

2

for a discharge. Finding no clear error in the bankruptcy court’s determination,

the district court affirmed. We AFFIRM for the same reasons. 

Factual and Procedural History

In 1965, Ostrom, then 15-years-old, began working as a tile finisher. He

continued in this employment until 1990, when he was hospitalized due to a

bacterial infection. This affliction prevented Ostrom from continuing to work as

a tile finisher and led him to gain roughly 200 pounds, which caused his health

problems to worsen. In 1990, the Social Security Administration determined

Ostrom to be disabled, and he began receiving disability payments. 

Hoping to find new employment, Ostrom pursued other fields and

ultimately returned to school to study social work and counseling. Ostrom

attended the University of North Texas from 1994 through 2002; there he

obtained a Bachelor of Science degree in Social Work and a Master of Science

degree in Counseling. To fund this education, Ostrom took 17 student loans. In

2003 he consolidated these loans into a single unsubsidized federal consolidation

student loan by executing a promissory note in the amount of $68,945.30.

Appellee-Cross Appellant Educational Credit Management Corporation

(“ECMC”) holds the interest in this note.

During his studies, Ostrom discovered that he also suffered sleep-related

health problems. In 1999, he was diagnosed with sleep apnea, a condition that

causes him to stop breathing during sleep. As treatment, Ostrom received a

breathing apparatus to wear while sleeping; however because Ostrom’s weight

forces him to sleep lying face-down, the apparatus, which fits as a mask, proved

unusable. Ostrom’s sleep conditions compounded in 2002 when he began

suffering from insomnia. Ostrom contends that this insomnia is effectively

untreatable in conjunction with his sleep apnea because any drugs that would
No. 07-40991

1 ECMC also cross appealed an aspect ofthe bankruptcy court’s ruling, but, as discussed

infra, because we affirm the judgment below we need not address ECMC’s cross appeal.

3

put him to sleep would also prevent him from awakening when his breathing

stopped. As a result of his insomnia, Ostrom experiences impaired concentration

and decreased functionality. 

Despite these afflictions, Ostrom completed his degree programs and

began his brief counseling career. From April through November of 2002,

Ostrom was employed as an independent counselor for which he was paid

$18,000.00. Subsequently, Ostrom was offered a counseling position at a state

prison in Wyoming, however, Ostrom declined the job out of fear that the effects

of his sleeping disorders would impede his counseling abilities. Ostrom sought

no further employment in the field of counseling and now serves as the primary

care giver to his elderly mother; he receives no compensation for this service.

On March 10, 2004, Ostrom filed a petition for relief under Chapter 7 of

the Bankruptcy Code, and on June 14, 2004, he filed the adversarial proceeding

underlying this appeal, seeking discharge of his student loan debt under 11

U.S.C. § 523(a)(8). Ostrom has never made payments on his loans. As of

September 21, 2005, Ostrom owed $74,013.74 in loan debt, and the sum was

accruing interest at a rate of 4%.

The bankruptcy court held a hearing on the issue on December 6, 2005,

and denied Ostrom’s petition to discharge his student loan debt in a ruling read

into open court on February 28, 2006. It entered this ruling as a final judgment

on March 24, 2006. Ostrom appealed the matter to the district court, which

affirmed the bankruptcy court’s judgment for the reasons stated by the

bankruptcy court. Ostrom then appealed to this court.1
No. 07-40991

4

Analysis

Ostrom invokes Section 523(a)(8) of the Bankruptcy Code as the basis for

discharging his student loan debt. Section 523(a)(8) excepts from discharge a

loan made, insured, or guaranteed by a governmental unit, or made by a

program funded in whole or in part by a governmental unit, unless excepting

such debt from discharge will impose an undue hardship on the debtor. 11

U.S.C. § 523(a)(8). This provision covers Ostrom’s federal student loans, so to

receive a discharge Ostrom must demonstrate that his student loan debt imposes

an undue hardship upon him. See In re Gerhardt, 348 F.3d 89, 91 (5th Cir.

2003).

As the measure for “undue hardship” in this context, we have adopted the

test articulated in the Second Circuit’s decision in Brunner v. New York State

Higher Education Service Corp., 831 F.2d 295 (2d Cir. 1987). See In re Gerhardt,

348 F.3d at 91. Under the Brunner test, to show undue hardship a debtor must

demonstrate three elements: (1) that the debtor cannot maintain, based on

current income and expenses, a minimal standard of living for himself and his

dependents if forced to repay the loan, (2) that additional circumstances exist

indicating that this state of affairs is likely to persist for a significant portion of

the repayment period of the loan, and (3) that the debtor has made good-faith

efforts to repay the loan. Id. 

Applying the Brunner test, the bankruptcy court found that Ostrom

satisfied the first and third prongs but that Ostrom had not met the second

prong because he presented no evidence, other than his own testimony, that his

impairment was likely to persist well into the future and prevent him from
No. 07-40991

5

earning income sufficient to pay his student loans. The district court affirmed

this finding, and Ostrom now challenges it before this court. 

“In the bankruptcy appellate process, we perform the same function as did

the district court: Fact findings of the bankruptcy court are reviewed under a

clearly erroneous standard and issues of law are reviewed de novo.” In re

Berryman, 159 F.3d 941, 943 (5th Cir. 1998). Here Ostrom contents only that

the bankruptcy court erred in its factual finding that he could not fulfill the

second Brunner prong, so we review that finding for clear error. “A factual

finding is not clearly erroneous if it is plausible in the light of the record read as

a whole.” In re. Ramba, Inc., 416 F.3d 394, 402 (5th Cir. 2005). 

The bankruptcy court’s finding was not implausible in light of the record

as a whole. The bankruptcy court relied on specific record evidence, and the lack

thereof, to conclude that Ostrom had not established that he would be unable to

make loan payments in the future. Specifically, the bankruptcy court noted that:

(1) Ostrom presented no evidence, other than his own testimony, that any

impairments to his earnings are likely to persist into the future, (2) Ostrom

introduced no evidence that the effects of his sleeping problems preclude him

from serving as a counselor, and (3) Ostrom was able to obtain a master’s degree

and serve as a private counselor despite his sleeping problems. Based on this

record evidence, the bankruptcy court plausibly concluded that Ostrom had not

demonstrated that his current financial state would continue well into the

future, so it did not clearly err in finding that Ostrom had not fulfilled the

second Brunner prong. Thus, we affirm the bankruptcy court’s findings.

Because we can affirm the denial of Ostrom’s petition on these grounds,

we need not address ECMC’s arguments that the district court erred in
No. 07-40991

6

affirming the bankruptcy court’s finding that Ostrom satisfied the third prong

of the Brunner test.

Conclusion

For the foregoing reasons, we AFFIRM the judgment below.