Abdul-Khabir v. University of Cincinnati et al

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In Re
NGQIKA KWAMINAH
ABDUL-KHABIR
Debtor
NGQIKA KWAMINAH
ABDUL-KHABIR
Plaintiff
vs.
GREAT LAKES
EDUCATIONAL LOAN
SERVICES, ET AL.
Defendant
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Case No. 04-19017
Chapter 7
Judge Hopkins
Adversary Case No. 05-1049
MEMORANDUM OF DECISION ON TRIAL OF COMPLAINT
TO DETERMINE DISCHARGEABILITY OF STUDENT LOANS
This document has been electronically entered in the records of the United
States Bankruptcy Court for the Southern District of Ohio.
IT IS SO ORDERED.
Dated: December 02, 2005
____________________________________________________________
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On October 26, 2005, the Court conducted a trial on the Plaintiff's complaint
to determine the dischargeability of her student loans pursuant to 11 U.S.C.
§ 523(a)(8). For the reasons stated below, the Court will enter a judgment dismissing
the complaint and deeming the debts to be nondischargeable.
APPLICABLE LAW
Section 523(a)(8) provides in relevant part:
(a) A discharge under section 727 . . . of this title does not
discharge an individual debtor from any debt–
. . .
(8) for an educational . . . loan made, insured, or
guaranteed by a governmental unit, . . . unless excepting
such 	debt 	from 	discharge 	would 	impose 	an 	undue
hardship on the debtor or the debtor's dependants[.]
11 U.S.C. § 523(a)(8). 	The debtor bears the burden of proof under § 523(a)(8).
Dolph v. Pennsylvania Higher Educ. Assistance Agency (In re Dolph), 215 B.R. 832,
836 (B.A.P. 6th Cir. 1998); Ledbetter v. United States Dept. of Educ. (In re
Ledbetter), 254 B.R. 714, 716 (Bankr. S.D. Ohio 2000) (Hopkins, J.).
"Undue hardship" is not a term that is defined under the Bankruptcy Code.
To determine whether excepting a student loan debt from discharge would pose an
undue hardship on the debtor or the debtor's dependants, the Sixth Circuit has
adopted the three-part test set forth in Brunner v. New York State Higher Educ.
Servs., 831 F.2d 395, 396 (2d Cir. 1987). 	See Oyler v. Educ. Credit Management
Corp. (In re Oyler), 397 F.3d 382, 385 (6th Cir. 2005). The Brunner test requires
proof of each of the following elements:
(1) that the debtor cannot maintain, based on current income and
expenses, 	a 	"minimal" 	standard 	of 	living 	for 	herself 	and 	her
dependents 	if 	forced 	to 	repay 	the 	loans; 	(2) 	that 	additional
circumstances exist which suggest that this state of affairs is likely to
persist for a significant portion of the repayment period of the student
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loans; and (3) that the debtor has made good faith efforts to repay the
loans.
Brunner, 831 F.3d at 396.
FACTS
The Plaintiff, Ngqika Kwaminah Abdul-Khabir, executed four promissory
notes for educational purposes. Ms. Abdul-Khabir used the loan proceeds to attend
the University of Cincinnati ("UC") between 1994 and 1998. Although she did not
obtain a degree, she is six credits short of a social work degree. The amount due
and owing on the notes as of October 26, 2005, excluding collection costs, is
$36,946. Ms. Abdul-Khabir has never made a payment on the debt.
Ms. Abdul-Khabir is thirty-three years old, has no physical or mental
disabilities, and supports two dependent children. She is presently employed as a
full-time courier driver, earning $10 per hour and medical benefits.
Ms. Abdul-Khabir is eligible to consolidate her loans through the William D.
Ford Direct Loan Consolidation Program ("Ford Program"). 	Under the Ford
Program, the borrower can repay under a standard, extended or graduated
repayment plan, which may extend the payments up to thirty years, depending on
the loan balance. The borrower can also choose a repayment plan that bases the
monthly payment on the borrower's disposable income. 	This plan is called the
Income Contingent Repayment Plan ("ICRP"). 	If the borrower does not have
sufficient income during any given year, the payment for that year could be as low
as $0. Moreover, any balance remaining after twenty-five years is canceled. Ms.
Abdul-Khabir has yet to apply for any of the foregoing plans.
A NALYSIS
Based upon the totality of the circumstances, the Court finds that Ms. Abdul-
Khabir failed to sustain her burden of proof on at least two of the Brunner elements.
I. 	Likelihood that State of Affairs Will Persist for Significant Portion of
Repayment Period
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To sustain her burden under the second prong of Brunner, Ms. Abdul-Khabir
"must precisely identify her problems and explain how her condition would impair
her ability to work in the future." Tirch v. Pennsylvania Higher Educ. Asst. Agency
(In re Tirch), 409 F.3d 677, 681 (6 th Cir. 2005). She must demonstrate "a certainty
of hopelessness, not merely a present inability to fulfill a financial commitment."
Oyer, 397 F.3d at 386.
Ms. Abdul-Khabir is relatively young, well-spoken, healthy and educated.
She is six credits shy of completing a degree in social work. Even if she chooses
not to obtain a degree, her education and her presentation in this adversary
proceeding 	reflect 	that 	she 	is 	likely 	underemployed 	as 	a 	courier 	driver.
Consequently, she has not demonstrated that her state of affairs will persist for a
significant portion of the repayment period.
II. 	Good Faith Efforts to Repay the Loans
Although not a per se indication of a lack of good faith, a debtor who fails to
take advantage of the ICRP bears a "heavy burden" under the third prong of
Brunner. Tirch, 409 F.3d at 682-83.
Ms. Abdul-Khabir has failed to apply for any of the administrative remedies
under the Ford Program, ICRP included. Combined with the fact that she has yet
to make a payment on her student loans, the Court concludes that she failed to
sustain her burden of proof on the third prong of Brunner.
Having failed to meet her burden of proof on two of the essential elements
in the three-prong Brunner test, the Court need not consider the third. The Court
does note, however, that Ms. Abdul-Khabir currently resides in a suite hotel where
her monthly living expenses clearly exceed what she would normally need to pay
for a rental unit in the area according to her own testimony. From the evidence, it
would appear that Ms. Abdul-Khabir could, based on her current income and on
making certain reasonable adjustments to her living arrangements, either by moving
into an apartment or in with relatives, one of whom provides shelter for one of
Debtor’s dependents, maintain a minimal standard of living while repaying a
portion of her student loans.
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C ONCLUSION
For the foregoing reasons, Ms. Abdul-Khabir did not sustain her burden of
proving undue hardship under 11 U.S.C. § 523(a)(8). 	Accordingly, Ms. Abdul-
Khabir's student loan debts to Educational Credit Management Corporation are
NONDISCHARGEABLE and the complaint will be DISMISSED. A judgment to
this effect will be entered.
Copies to:
Ngqika Kwaminah Abdul-Khabir
P.O. Box 36544
Cincinnati, OH 45236-0544
Jeffrey S. Rosenstiel, Esq.
jrosenstiel@fbtlaw.com
U.S. Trustee
ustpregion09.ci.ecf@usdoj.gov
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