Epperson v. Educ. Credit Mgmt. Corp. (In re Epperson)
| Decision Date | 24 February 2021 |
| Docket Number | Adversary No. 18-4015,Case No. 17-42001 |
| Parties | IN RE: BRADLEY STEVEN EPPERSON xxx-xx-3599 Debtor BRADLEY STEVEN EPPERSON Plaintiff v. EDUCATIONAL CREDIT MANAGEMENT CORPORATION Defendant |
| Court | U.S. Bankruptcy Court — Eastern District of Texas |
Upon trial of the complaint filed by the Plaintiff, Bradley S. Epperson ("Plaintiff"), in the above-referenced adversary proceeding, seeking a determination that the student loan indebtedness currently due and owed to the Defendant, Education Credit Management Corporation ("ECMC"), should be discharged because it imposes an undue hardship upon the Plaintiff and his dependents, the Court issues the following findings of fact and conclusions of law pursuant to Fed. R. Civ. P. 52, as incorporated into adversary proceedings in bankruptcy cases by Fed. R. Bankr. P. 7052.
1. The Plaintiff, Bradley S. Epperson, is a 54-year-old married man who resides with his wife of twenty years in a five-person household in Allen, Texas.
2. Between the fall of 1987 and the summer of 1996, the Plaintiff utilized various educational loans to finance certain tuition expenses, including payments made to the DeVry Institute of Technology in Phoenix, Arizona, where he graduated with a Bachelor of Science degree in Electronics Engineering Technology.
3. Prior to that time, the Plaintiff was awarded an Associate of Arts Degree in Computer Technology from the ABC Technical and Trade School in 1988.
4. The student loans procured by the Plaintiff qualified him to obtain various engineering positions over the course of a work career exceeding twenty years.2
5. Over the life of the loans, the Plaintiff has paid approximately $48,901 in service of his student loan obligations.
6. On May 9, 1997, the Plaintiff consolidated his educational loans in the cumulative amount of $47,059.54.3
7. Among other things, the consolidation paid the outstanding balances on the Plaintiff's various educational loans that had been tendered through both subsidized and unsubsidized disbursements through the United States Department of Education, as well as other non-governmental lenders, and consolidated them into a single loan with a fixed interest rate.
8. The Defendant, ECMC, is the present owner and holder of the consolidated note which it acquired by means of assignment on April 13, 2018 after the initiation of this adversary proceeding by the Plaintiff.4
9. The Plaintiff acknowledges that the indebtedness currently owed to ECMC is an educational loan "made, insured or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit . . . " which meets the statutory definition of 11 U.S.C. § 523(a)(8)(A).
10. On September 11, 2017, the Plaintiff, acting in a pro se capacity, filed a petition for relief under Chapter 7 of the Bankruptcy Code in this Court, the Hon. Brenda T. Rhoades, presiding.5
11. The Plaintiff's spouse, Viktoriya Epperson ("Ms. Epperson"), did not join in the bankruptcy petition.
12. The bankruptcy schedules filed under oath by the Plaintiff reveal that he owns a residential homestead in Allen, Texas which he valued in 2017 at $310,000, subject to an approximate mortgage debt of $192,000, thereby enjoying an equity cushion in that exempt real property asset of approximately $118,000.6
13. In addition to his mortgage indebtedness of $192,000, the Plaintiff's initial bankruptcy schedules filed on the Petition Date revealed no priority debt and unsecured indebtedness totaling $29,146.70, excluding the student loan indebtedness currently under review, which was comprised primarily of accrued credit card indebtedness.7
14. An additional $2,208.22 of unsecured indebtedness was added through an amended Schedule E/F filed on February 16, 2018.8
15. The Plaintiff also disclosed typical personal property assets for which exemptions were claimed and allowed.
16. A Notice of No Distribution was filed by the Chapter 7 Trustee on November 3, 2017.9
17. On August 18, 2018, an order of discharge was entered in Plaintiff's favor in the underlying Chapter 7 bankruptcy case.10
18. Despite having received a discharge of a considerable amount of unsecured debt, the Plaintiff nevertheless contends that his ongoing obligation to address his student loan indebtedness in the post-discharge period imposes an undue hardship upon himself and his dependents.
19. Thus, on February 23, 2018, the Plaintiff initiated the present action seeking a discharge of his student loan indebtedness to ECMC as an "undue hardship" within the meaning of § 523(a)(8) of the Bankruptcy Code.
20. The Plaintiff was the only witness in support of his case-in-chief.
21. With regard to his student loan indebtedness, the principal balance of the Plaintiff's loans as of April 20, 2018 was $39,246.14, at an interest rate of 9%.11
22. The Plaintiff first contends that he and his family are currently unable to maintain a minimal standard of living because of his ongoing obligation to satisfy his student loan obligations which remain due and owing to the Defendant.
23. The Plaintiff is currently employed on a full-time basis as a Quality Assurance Engineer for Abbott Laboratories for which he evaluates the efficacy and safety of various healthcare-related products to determine their fitness for distribution and sale to certain labs and medical hospitals.
24. As of November 2020, the Plaintiff has been employed by Abbott for four (4) years.
25. The Plaintiff currently enjoys a gross monthly income of $7,176 arising from his employment at Abbott, for an annual gross salary of $86,112.12
26. Over his four-year tenure at Abbott, the Plaintiff has received multiple performance-based pay increases, although such increases are provided solely at his employer's discretion.
27. The Plaintiff deducts on a pretax basis the following monthly amounts:13
| (a) |
| health insurance premiums: |
| $ 516 |
| (b) |
| flex payments: |
| $ 121 |
| (c) |
| 401(k) contribution: |
| $ 215 |
28. At the present time, Ms. Epperson holds part-time employment with Aurora Home Health as a registered nurse involved in home health care in Plano, Texas.14
29. Ms. Epperson was forced to relinquish her role as a full-time nurse in 2017 due to a chronic illness.
30. Based upon her earnings of $10,330 in the first half of 2020,15 Ms. Epperson presently has a current gross monthly salary of approximately $1,721.00 per month.16
31. Thus, the Plaintiff's household enjoys a gross monthly income of $8,897 per month, for a gross annual income total of $106,764.
32. The Plaintiff testified that he exercises very little to no monetary control in connection with his family's household budget.
33. Significant household expenses, such as mortgage payments and/or utility expenses, are paid directly by Ms. Epperson.
34. The Plaintiff acknowledged at trial that he is unable to manage the household finances because he "lacks the capacity" to deal sufficiently with bills and household expenses as they become due.
35. At all relevant times, the Plaintiff and his spouse maintain separate checking and savings accounts which are kept segregated, according to the Plaintiff, as a consequence of his inability to sufficiently control the household's day-to-day expenditures.
36. Thus, the Plaintiff and his spouse operate their household under an agreement in which they independently deposit and transfer sums into a shared savings account as a mechanism to address their monthly expenditures.17
37. Therefore, the Plaintiff could not testify regarding the status of banking activities by his non-debtor spouse.
38. The Plaintiff has three children: ages, 8, 13, and 13.
39. The following constitutes the Plaintiff's estimated monthly expenses as expressed in his schedules filed in his bankruptcy case, as subsequently modified by his trial testimony:
40. The Plaintiff and his spouse elect to send all of their children to private school at an average aggregate cost of nearly $1,300 per month.
41. The Plaintiff testified regarding unanticipated medical and dental procedures that are often needed for his children which reduce the amount of discretionary funds available to the household.
42. The Plaintiff also testified that he suffers with mental health issues for which he has been hospitalized in the past.
43. The Plaintiff testified that he had been previously diagnosed with Bipolar disorder.
44. The Plaintiff testified that he suffers from an innate disposition toward suicidal ideation, which has led him to attempt suicide on three separate occasions.
45. The Plaintiff stated that he often suffers from impaired concentration, as well as moderate to severe mood swings, when in the midst of a depressive episode.
46. The Plaintiff insists that his condition is worsening, predicts that he will not be able to maintain employment for more than a year, and worries that he will be terminated as a consequence of his bipolarism.
47. The Plaintiff believes that his depressive condition will eventually deteriorate beyond his capacity to control.
48. The Plaintiff offered no corroborating testimony from any doctor, or any other medical source, regarding the status or treatment options related to his medical prognosis.
49. Although the Plaintiff's medical condition may have adversely impacted his ability to regulate his emotions for periods of time, it has not prevented him from obtaining gainful employment, nor has it yet significantly impacted his current employment status as an engineer at Abbott Laboratories.
50. The Plaintiff's household has no...
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