169 B.R. 1 (Bkrtcy.D.Mass. 1994), 93-2003, In re Delbonis
|Docket Nº:||Adv. No. 93-2003.|
|Citation:||169 B.R. 1|
|Party Name:||In re John Carl DELBONIS, Armanda Delbonis, Debtors. TI FEDERAL CREDIT UNION, Plaintiff, v. John Carl DELBONIS, Defendant. Bankruptcy No. 93-18441-WCH.|
|Case Date:||June 22, 1994|
|Court:||United States Bankruptcy Courts, First Circuit|
Theodore J. Koban, Attleboro, MA, for debtors.
Paul F. Lorincz, Coogan, Smith, Bennett, McGahan, Lorincz & Jacobi, Attleboro, MA, for TI Federal Credit Union.
WILLIAM C. HILLMAN, Bankruptcy Judge.
This is an adversary proceeding brought by TI Federal Credit Union ("TI") against Debtor John Carl Delbonis ("Debtor") to determine the dischargeability of certain loans pursuant to 11 U.S.C. § 523(a)(8). 1
The parties have submitted the issues to the Court for decision on an agreed statement of facts. The debtor has also filed a motion for summary judgment.
1. TI is a Federal credit union organized under the Federal Credit Union Act, 12 U.S.C. § 1751 et seq. It is not a governmental unit, nor is it a state chartered nonprofit corporation. It is exempt from taxation to the extent provided by 12 U.S.C. § 1768. 2
2. The loan monies advanced to Debtor were not guarantied or funded under any governmental program.
3. Between December 9, 1986 and January 4, 1991, TI extended $43,114,87 in loans (the "Loans") to Debtor. As of March 25, 1993 the principal balance due to TI was $32,618.27.
4. All loans were made under TI's "Education Loan" program. The terms of that program provide for a lower than standard interest rate. It is also required that all loan proceeds must be made payable to a school.
5. The loan proceeds were used solely for the educational expenses of Debtor's children and his wife. Neither Debtor's wife nor his children were liable for the repayment of the loans.
6. TI's Charter authorizes it to issue shares with a par value of $5.00. Section 5(c) of the By-Laws grants to the board of directors the "authority to declare and authorize the payment of annual or semiannual dividends on shares of members."
It has been stipulated that the proceeds of the Loans were used solely for the educational expenses of Debtor's children and wife. I agree with Judge Harrington that loans incurred to educate members of a debtor's family qualify as educational loans within the meaning of 11 U.S.C. § 523(a)(8). Education Resources Institute v. Wilcon (In re Wilcon), 143 B.R. 4 (D.Mass.1992).
As applicable here, § 523(a)(8) makes nondischargeable educational loans "made under any program funded ... by a ... nonprofit institution." TI funded the Loans.
TI contends that it is a "nonprofit institution" as that term is used in the statute based upon its stipulated tax exemption under 12 U.S.C. § 1768, quoted above, as well as...
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