In re Densmore, Bankruptcy No. 79-00136G

Decision Date17 December 1979
Docket NumberBankruptcy No. 79-00136G,Adv. No. 79-0013G.
Citation8 BR 308
CourtU.S. Bankruptcy Court — Northern District of Georgia

Thomas P. Stamps, Macey & Zusmann, Atlanta, Ga., for plaintiff.

G. William Jessie, Sr., Dawsonville, Ga., for defendant.


WILLIAM L. NORTON, Jr., Bankruptcy Judge.

This matter came before this Court for a hearing on Georgia Higher Education Assistance Corporation's Complaint and Application For Determination of Dischargeability of Plaintiff's Debt and For Relief From Automatic Stay. The Complaint concerned the dischargeability of an education loan pursuant to 11 U.S.C. § 523(a)(8). A Consolidated Pre-Trial Order was entered by the Court on May 15, 1980, providing that the sole issue for determination at trial was whether failure to discharge the student loan debt would create an undue hardship on the Defendant or his dependents. The issue was tried on October 31, 1980.


Defendant utilized the funds obtained from Plaintiff to attend Pickens Area Vocational Technical School in Jasper, Georgia, from which he obtained a certificate of completion in the course of brick and block masonry.


Defendant has never been employed as a mason and is currently employed as a truck driver.


Defendant estimates that his gross income for the past seven months was approximately $7,650.00, averaging approximately $1,100.00 per month.


Defendant estimates a significant reduction in his monthly income for the next several months due to the seasonal nature of his employment.


Defendant's monthly budget shows expenditures of $1,099.12 per month, including $351.00 per month payable on indebtedness which was reaffirmed by the Defendant in his bankruptcy proceeding. Of the indebtedness reaffirmed by the Defendant, monthly payments of $219.00 will terminate by October, 1981. An analysis of the budget and Defendant's testimony show that his income presently provides him with approximately $10.00 per week over and above his fixed monthly expenditures. This is relatively small in amount, but in the absence of presently unforeseen circumstances, repayment of the debt reasonably can be expected to be made.


Defendant's present net disposable income and the prospects of increased available monies beginning in October, 1981, are sufficient to allow Defendant to repay his education loan without undue hardship provided the periodic payments and the time allowed to repay the debt are reasonable to this anticipated financial ability to pay. The payment schedule herein required is deemed reasonable by the court and all parties at the hearing and should not be unduly difficult for debtor to pay on the due dates specified.


A review of 11 U.S.C. § 523(a)(8), its predecessor statute 20 U.S.C. § 1087-3, and the case law which has developed regarding these statutes reveal that the generally accepted standard for determining the question of undue hardship is whether there are present "such unique circumstances to render it less likely, or likely only with extreme difficulty, or unlikely at all, that the bankrupt will within the foreseeable future be able to honor his commitment." In Re Kohn, 5 BCD 419, 424 (S.D.N.Y.1979).

It is clear that there must be a showing of extraordinary circumstances before the Court may discharge a debtor of educational loans within the parameters of 11 U.S.C. § 523(a)(8). The Court finds that requiring this Debtor to repay this debt will constitute a hardship, perhaps considerable hardship1, but will not place upon him or any of his dependents a hardship which is "undue" within the...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT