Opinion ID: 223512
Heading Depth: 2
Heading Rank: 3

Heading: Household Expenses

Text: A debtor's household income must be used to satisfy reasonable and necessary expenses. In re Jesperson, 571 F.3d at 779. To be reasonable and necessary, a debt must be `modest and commensurate with the debtor's resources.' Id. at 780 (quoting In re DeBrower, 387 B.R. 587, 590 (Bankr.N.D.Iowa (2008))). [I]f the debtor's reasonable financial resources will sufficiently cover payment of the student loan debt  while still allowing for a minimal standard of living  then the debt should not be discharged. In re Jesperson, 571 F.3d at 779. ECMC challenges as unreasonable the monthly car payment of $850 on the 2007 Chevrolet Suburban SUV and the monthly payment of $373.52 on the $48,000 second mortgage, of which, as set forth earlier, $30,000 was used to build the deck porch. ECMC points out that the monthly payment on the Suburban alone exceeds the monthly payment of $593.98 that Walker would pay on her student loan debt under the ICRP and questions the need to purchase a new vehicle when the family owned two other mini-vans and had loaned its sedan to Walker's mother. Both the bankruptcy court and the BAP were troubled by the cost of these two items, as are we. Yet we also recognize that the porch and the Suburban fulfill important functions in the daily life of this family of seven. Moreover, because fairness and equity require each undue hardship case to be examined on the unique facts and circumstances that surround the particular bankruptcy, In re Long, 322 F.3d at 554, we consider these expenses in light of the overall financial and interpersonal context of Walker's household. As outlined above, even if we exclude all the payroll deductions when calculating net income, the Walkers run a deficit of nearly $650 per month. Aside from challenging specific expenses as unreasonable, ECMC did not rebut the findings of fact on which this calculation is based, nor did it identify a scenario under which Walker could realistically increase the household's income. Even if the family had chosen a more modest vehicle or had not added a deck to the home, it is unrealistic to expect that Walker could meet her minimum ICRP payment of $593.98 in light of the monthly household deficit in excess of that amount. Though we may question the wisdom of the particular purchases at issue, we also recognize that the minimal standard of living for Walker must account for the size of her family and the special needs of her two autistic children. On the basis of the record before us, we agree with the BAP's conclusion that the reality of the Walkers' budget is that Michele cannot afford to make any payments on her student loans and still maintain a minimal standard of living. That circumstance, based on the evidence offered, is likely to continue for many years.... In re Walker, 427 B.R. at 487. This is not a case in which a debtor willfully chose to avoid payments that could have been made or was underemployed or unemployed for no discernible reason. Caring for her five young children has become Walker's full-time occupation. Both the bankruptcy court and the BAP determined that it was unlikely that Walker would be able to work until the older twins reached the age of majority, if at all, and noted that the staleness of her education at that time would limit her employment options. We agree that, in light of the overall circumstances of this case, excepting Walker's student loan debt from discharge would impose an undue hardship on her. The judgment is affirmed.