District Court Affirms Finding of No Undue Hardship for Lawyer/Nurse over 60 Years of Age who Sought to Discharge Student Loans

District Court Affirms Finding of No Undue Hardship for Lawyer/Nurse over 60 Years of Age who Sought to Discharge Student Loans

Debtor incurred the debt held by ECMC to pay for her law school education. She 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, Debtor 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, Debtor took a pro bono position at an elder law non-profit to gain legal experience. In May 2009, approximately six months later, she decided to leave this position. She thought that the organization liked her, but it would never hire her. Debtor 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.

Also in or around May 2009, Debtor gave her daughter a one-half acre lot that she owned in another state. Debtor’s daughter built a house on the lot, and the total value of the improved property was assessed at $226,000.

In August 2009, Debtor was hit by an SUV while crossing the street. She sustained multiple injuries, including a broken ankle.

In May 2010, Debtor returned to her home state and was sworn in to the State Bar. She had at least one job interview. In June 2010, she rented an office space  for $200 a month and opened a solo law practice. She retained one client, who paid her $500 to compose a martial dissolution letter. With no additional clients, she closed her law office in July 2011. Since that time, Debtor has not sought legal work. She took a part-time position at the non-profit Catholic Charities for $10 an hour.

In 2011, Debtor enrolled in nursing school, inspired by the success of her step-brother. She testified she did not know how physically demanding nursing would be. Chronic pain, which the Debtor had experienced since the 2009 accident, and a separate neck injury of unknown origin, hampered her progress in nursing school. She graduated the nursing program in 2013, but then an illness confined  Debtor to her bed for the next several months. During that time, she continued to work at Catholic Charities for approximately 15 hours a week.

In November 2014, Debtor took and passed the nursing licensing exam. She began working as a nurse at  the following month. Her wage was $26 per hour, and she worked for 25-30 hours a week. She left this job and took a position at a nursing staffing agency that placed her at nursing homes. Debtor 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. She typically worked two to three days a week, depending on whether she felt able to do more. She 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.

The Debtor continues to experience severe pain in her neck, right hip, and right ankle. Debtor has never applied for Social Security Disability Insurance (“SSDI“), and she does not have a prescription for pain medication.

The bankruptcy court determined that Debtor’s gross income in 2015 was $32,530.50 and that this amount barely covered her most basic living expenses. She also has deferred necessary and significant medical, dental, home, and car expenses. At the time of the trial, she 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.

The Debtor filed for Chapter 7 bankruptcy in February 2015. The bankruptcy court held an evidentiary hearing on September 23, 2016. She proceeded pro se and was the sole witness. On February 24, 2017, the bankruptcy court issued its final determination that the Debtor 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 the Debtor’s testimony on the basis that it was contradictory or improbable. Debtor timely appealed that determination and opted to file her appeal with the District Court.

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