Court Awards NACBA Member $11,000 in Attorney’s Fees in Student Loan Discharge action, since the Work was Reasonably likely to Benefit the Debtor at the time that it was Performed

Court Awards NACBA Member $11,000 in Attorney’s Fees in Student Loan Discharge action, since the Work was Reasonably likely to Benefit the Debtor at the time that it was Performed

On October 13, 2016, Debtor filed this Chapter 13 case. On June 12, 2017, the Court confirmed the Debtor’s plan. On June 18, 2017, the Debtor filed an adversary proceeding against Educational Credit Management Corporation (“ECMC”) under § 523(a)(8) of the Bankruptcy Code, seeking to discharge over $223,000.00 of student loans that the Debtor took out to pay for law school and for her daughters to go to college. The complaint alleged that the Debtor is 66 years old, has custody of three grandchildren under the age of seven, has substantial debt owing to the Internal Revenue Service, and that repaying her student loans owing to ECMC would impose an undue hardship on her and her dependents.

ECMC answered the complaint and filed a motion for summary judgment. The motion was supported by excerpts of the Debtor’s deposition testimony, as well as numerous tax returns, bank statements, and other documentary evidence. The Debtor filed a response, which was also supported by excerpts of her deposition testimony, documentary evidence, and affidavits.

On April 3, 2018, the Court denied ECMC’s motion for summary judgment in a bench opinion in which the Court identified various material issues of fact that are in genuine dispute. Following the Court’s bench opinion, the Debtor and ECMC agreed to dismiss the adversary proceeding, without prejudice, so that the Debtor could pursue an income based repayment program with ECMC, putting aside for the time being the question of whether the Debtor’s student loans are non-dischargeable under § 523(a)(8).

On April 17, 2018, the Debtor’s attorney, Kurt O’Keefe (“O’Keefe”) filed a second application for attorney fees and expenses (“Second Application”) (ECF No. 84). The Second Application notes that O’Keefe was previously awarded fees and expenses in the amount of $7,106.62 through confirmation of the Debtor’s plan. The Second Application seeks an award of post-confirmation fees in the amount of $11,270.00 and expenses in the amount of $253.19. The vast majority of these fees and expenses relate to services performed in prosecuting the adversary proceeding against ECMC. On May 8, 2018, the Chapter 13 Standing Trustee, David Ruskin (“Trustee”) filed an objection (“Objection”) (ECF No. 87). On June 4, 2018, O’Keefe filed a response (ECF No. 91). On June 5, 2018, the Court held a hearing on the Second Application. The Court took the Second Application under advisement and is now ready to rule on it.

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