Debtor with $0 Monthly Student Loan Payment under Income-Based Repayment Plan Survives ECMC’s Motion for Summary Judgment in Student-Loan Discharge Case

Debtor with $0 Monthly Student Loan Payment under Income-Based Repayment Plan Survives ECMC’s Motion for Summary Judgment in Student-Loan Discharge Case

Chapter 7 debtor, seeks to discharge her student loans despite enrolling in an income-based repayment plan (“IBR Plan”) that reduced her monthly payments to $0. The Educational Credit Management Corp. (“ECMC”)—a seasoned veteran of this line of litigation—says this should stop her at the summary-judgment stage. It argues that the debtor has not pled sufficient facts to show she cannot maintain a minimal standard of living while making her payments, Debtor argues she is currently unable to maintain such a standard.

Debtor alleges that she incurred her student loans while pursuing a bachelor’s degree in the administration of justice. The parties agree that ECMC later acquired the loans and is the proper defendant in this matter. Debtor further alleges she cannot maintain a minimal standard of living while repaying her loans and that her current economic situation will persist through “a significant portion of the repayment period” because of her age and physical limitations stemming from multiple surgeries. Finally, she alleges she made a good-faith effort to repay her loans. 

Debtor is currently enrolled in an IBR Plan in which her monthly payments to ECMC are $0. ECMC acknowledges that, even though money is not exchanged, Debtor is making her monthly “payments” on the loans.

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