United States District Court, D. Maine
KATHLEEN L. BROWN, Plaintiff,
EDUCATION CREDIT MANAGEMENT CORP., Defendant.
ORDER ON PLAINTIFF'S APPEAL FROM A DECISION OF
THE BANKRUPTCY COURT
Torresen United States Chief District Judge
Kathleen Brown challenges the bankruptcy court's final
judgment that her student loans, held by Appellee Education
Credit Management Corporation
(“ECMC”), are non-dischargeable.
For the following reasons, I AFFIRM the
bankruptcy court's determination.
Brown disputes some of the bankruptcy court's factual
findings, the following factual background is not contested.
Brown incurred the debt held by ECMC to pay for her law
school education. Brown enrolled at the California Western
School of Law in January 2001 at the age of 44. She received
her Juris Doctor in May 2005. Upon graduation, Brown took a
series of accounting jobs to support herself. In 2008, she
passed the California bar exam. Once she became a member of
the California Bar, Brown took a pro bono position at an
elder law non-profit to gain legal experience. In May 2009,
approximately six months later, Brown decided to leave this
position. She thought that the organization liked her, but it
would never hire her. Brown sought paid legal work in
California, including applying to openings for contract
attorneys. She received a “number” of interviews,
but reported that potential employers told her that she was
too old to hire.
or around May 2009, Brown gave her daughter a one-half acre
lot that she owned in Camden, Maine. Brown's daughter
built a house on the lot, and the total value of the improved
property was assessed at $226, 000.
August 2009, Brown was hit by an SUV while crossing the
street. She sustained multiple injuries, including a broken
2010, Brown returned to Maine and was sworn in to the Maine
Bar. She had at least one job interview. In June 2010, Brown
rented an office space in Kennebunk, Maine for $200 a month
and opened a solo law practice. She retained one client, who
paid Brown $500 to compose a martial dissolution letter. With
no additional clients, Brown closed her law office in July
2011. Since that time, Brown has not sought legal work. She
took a part-time position at the non-profit Catholic
Charities for $10 an hour.
2011, Brown enrolled in nursing school, inspired by the
success of her stepbrother. Brown testified she did not know
how physically demanding nursing would be. Chronic pain,
which Brown had experienced since the 2009 accident, and a
separate neck injury of unknown origin, hampered Brown's
progress in nursing school. She graduated the nursing program
in 2013, but then an illness confined Brown to her bed for
the next several months. During that time, she continued to
work at Catholic Charities for approximately 15 hours a week.
November 2014, Brown took and passed the nursing licensing
exam. She began working as a nurse at Durgin Pines in
Kittery, Maine the following month. Her wage was $26 per
hour, and she worked for 25-30 hours a week. Brown left
Durgin Pines and took a position at a nursing staffing agency
that placed her at nursing homes. Brown found that while this
new position had a worse compensation package, it provided
her with more support and afforded her greater control over
which days and the number of days a week she worked. Brown
typically worked two to three days a week, depending on
whether she felt able to do more. Brown testified that she
looked for less physically demanding nursing jobs, but that
she is unqualified for them due to her lack of experience in
an acute care hospital setting.
continues to experience severe pain in her neck, right hip,
and right ankle. Brown has never applied for Social Security
Disability Insurance (“SSDI”),
and she does not have a prescription for pain medication.
bankruptcy court determined that Brown's gross income in
2015 was $32, 530.50 and that this amount barely covered her
most basic living expenses. Brown also has deferred necessary
and significant medical, dental, home, and car expenses. At
the time of the trial, Brown projected that her 2016 income
would be lower. She also expressed a plan to start drawing
from her social security benefits in 2017 at the age of 62
and to cut back the hours she works.
filed for Chapter 7 bankruptcy in February 2015. The
bankruptcy court held an evidentiary hearing on September 23,
2016. Brown proceeded pro se and was the sole witness. On
February 24, 2017, the bankruptcy court issued its final
determination that Brown failed to establish sufficient
evidence of hardship to justify discharge of her student
loans. In making this determination, the court declined to
credit some of Brown's testimony on the basis that it was
contradictory or improbable. Brown timely appealed that
determination and opted to file her appeal with the District
district court reviews a bankruptcy court's final
judgment on appeal, the district court may affirm, modify,
reverse, or remand the judgment. Crawford v. Riley (In re
Wolverine, Proctor & Schwartz, LLC), 436 B.R. 253,
260 (D. Mass. 2010). Questions of law are reviewed de novo,
while the underlying factual findings must stand unless they
are deemed clearly erroneous. Bronsdon v. Educ. Credit
Mgmt. Corp. (In re Bronsdon), 435 B.R. 791, 796 (2010).
In reviewing an appeal, courts should give “due regard
. . . to the opportunity of the bankruptcy court to judge the
credibility of the witnesses.” Palmacci v.
Umpierrez, 121 F.3d 781, 785 (1st Cir. 1997).
question on appeal is whether Brown failed to satisfy her
evidentiary burden to show repayment of her student loan
would pose an undue hardship.
Dischargeability of Student Loans
the Bankruptcy Code, student loans are not subject to the
general rule of dischargeability, but rather a student loan
may be discharged only where the debtor can show that payment
of the debt “would impose an undue hardship on the
debtor.” 11 U.S.C. § 523(a)(8). Courts employ a
burden-shifting analysis for the undue hardship inquiry.
First, the creditor bears the burden of showing that the debt
is the type excepted from discharge under § 523(a)(8).
Educ. Credit Mgmt. Corp. v. Savage (In re Savage),
311 B.R. 835, 837 (B.A.P. 1st Cir. 2004). Here, the parties
agree that Brown's student loans are regulated by §
523(a)(8). The burden therefore shifts to the debtor to show
that not discharging this debt would cause the debtor and her
dependents “undue hardship.” Id.
courts in the First Circuit analyze the existence of an undue
hardship under the totality of the ...