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ICYMI: Student loans in bankruptcy November 2017 [Trbovich]

December 28, 2017

Case info: Trbovich v. Nat’l Collegiate Student Loan Trust, 2017 WL 5514158 (Bankr. N.D. Ohio Nov. 16, 2017)

Case opinion: Download

TL;DR: Hey National Collegiate. If you’re going to move for summary judgment, get the facts right. National Collegiate’s motion for summary judgment: denied.

Related: Everything you need to know about student loans in bankruptcy November 2017

Moving my family in with my parents? This ain’t the plan I had for my life

Timmy Trbovich is married with 3 kids, lives with his parents, and earns about $40 thousand a year at a call center. His wife is unemployed. But she gets about $300 month in child support.


Rough life, right?

So here’s the deal. Timmy owes National Collegiate about $10 thousand for a private student loan. He couldn’t afford to repay it — obviously, right? he’s a married father of 3, living with his parents; that ain’t ideal — and NCSLT wouldn’t work with him on a lower monthly payment so Timmy did what he had to do: he filed bankruptcy and then later filed an adversary proceeding to try and discharge NCSLT’s loan as an undue hardship.1


After he filed bankruptcy, Timmy’s financial situation worsened. He lost his job. When he finally got a new one, his income dropped to about $27 thousand per year.



Procedural posture

National Collegiate moved for summary judgment because it believed the facts showed Timmy could repay the loan without experience undue hardship. But here’s the deal: National Collegiate based it’s motion on Timmy’s old job at the call center. It didn’t account for him losing several thousand a year in income.

What the court said

The court told National Collegiate something like this: “Stop being lazy. Do the work. Yeah, a debtor has a hard time proving undue hardship under the Brunner test. But you, lender, still have to do your job. Get the facts right. Don’t come into my court with this bullshit no more.”


Okay, so that’s not actually what the judge said, but that’s what my mind heard when I read this opinion.

National Collegiate lost its motion on all 3 prongs of Brunner. The court said that National Collegiate failed to show that there was no dispute as to a material fact that:

  1. The debtor, based on his current income, cannot maintain a minimal standard of living for himself and his dependents if forced to repay the loan;
  2. Additional circumstances exists to indicate his state of affairs is likely to persist for a significant portion of the loan’s repayment period; and
  3. He made a good faith effort to repay the loan.

What’s the impact

None. This is just another opinion in a big ass pile of opinions that don’t move us any closer to better understanding how to win an undue hardship case.

  1. It’s unclear whether he could’ve argued the loan was dischargeable because it wasn’t a qualified education loan.