In re Littell

• Decision Date: 21 August 1980
• Docket Number: Bankruptcy No. 380-00082,Adversary Proceeding No. 80-0062.
• Citation: 6 BR 85
• Parties: In Re Michael LITTELL, Nancy Jean Littell, Debtors. Michael LITTELL, Nancy Jean Littell, Plaintiffs, v. STATE OF OREGON acting By and Through the STATE BOARD OF HIGHER EDUCATION for and on behalf of Portland State University and State of Oregon acting by and through the State Scholarship Commission, Defendants.
• Court: U.S. Bankruptcy Court — District of Oregon

6 B.R. 85 (1980)

In Re Michael LITTELL, Nancy Jean Littell, Debtors Michael LITTELL, Nancy Jean Littell, Plaintiffs, v. STATE OF OREGON acting By and Through the STATE BOARD OF HIGHER EDUCATION for and on behalf of Portland State University and State of Oregon acting by and through the State Scholarship Commission, Defendants.

Bankruptcy No. 380-00082, Adversary Proceeding No. 80-0062.

United States Bankruptcy Court, D. Oregon.

August 21, 1980.

Donald J. Howe, Salem, Ore., for defendants.

Edward J. Jones, Oregon City, Ore., for plaintiffs.

FINDINGS AND CONCLUSIONS

FOLGER JOHNSON, Bankruptcy Judge.

The debtors attended college before their marriage to each other. The husband graduated in December, 1976, and the wife in March, 1978. To assist with college expenses Michael Littell obtained a National Direct Student Loan for approximately $3,000.00 with the money paid to him in several increments. He was to start repaying the loan ten months after graduation with payments calculated at $90.00 or $95.00 quarterly.

Nancy Jean Littell had obtained two loans-one National Direct Student Loan for approximately $2,800.00 and a guaranteed student loan for $750.00. These were to be repaid at $23.33 and $13.23 a month, respectively. Neither plaintiff has repaid any part of the above loans, thus leaving a substantial delinquency.

At the time the debtors were married in September, 1978, Nancy Littell had two children by a former marriage and is now receiving only $30.00 a month from the father. She recently consulted an attorney to determine if the child support payments could be increased, but the attorney advised her that it would not be worthwhile to pursue the matter in court in view of the earnings and financial circumstances of the former husband.

Michael Littell who is now 34 years old had one son by a former marriage and is making monthly child support payments of $100.00 for the support of such son.

Both plaintiffs majored in education and English with the thought of becoming teachers. Upon graduation from college they were unable to find teaching jobs or other jobs which would utilize their college education although both applied for teaching jobs and made an effort to find them both directly and through the state employment agency. Over a period of time the husband has worked at such jobs as an assistant to a landscape gardener, sanitation cleaner with Birdseye, a paper mill, a limited tutoring job through CETA, in charge of a residence at the Tongue Point Job Corp Center, and is now working as a service station attendant in Cannon Beach for wages of $4.40 an hour. This represents the highest paid position he has held since graduation and results in take-home pay of approximately $500.00 a month. Both he and his wife worked for a while on her parents' farm which resulted in negligible income for them.

Some time after their marriage the debtors moved to Cannon Beach as they preferred that area as a place to live and to raise their children and since they had not been able to obtain desirable employment in the Portland area. They found it very difficult to find any teaching job as the teacher turnover is very low, but the wife did do substitute teaching for periods not exceeding a week at a time, and she worked for a while in a grocery store. Through CETA she was able to obtain a half-time position as counselor in the community college in Astoria and still holds that position. Her place of employment is approximately thirty miles from her home. She stated, however, that the existence of the position would continue only as long as the voters continued to approve tax levies for the schools or the tax base would otherwise permit, and that her job is assured only for another year. Her net pay is approximately $450.00 a month giving the debtors a combined useable income, including the $30.00 child support, of $980.00.

They rent an old house with rent and utilities amounting to $320.00 a month. The house is heated by a wood stove and they gather most of the wood for this on the beach rather than buying it. The wife is also a good seamstress and makes the majority of the clothes for the family. They estimated car expense at $125.00 a month, food at $300.00 a month, medical, dental, and other miscellaneous expenses at $170.00 a month and in addition to this there is the $100.00 child support payment the husband owes each month. This gives them a budget of $1,015.00 which exceeds their income by $35.00 thus leaving no available excess for payment of student loans.

They are both in good health except that the husband suffers from tendonitis in his right elbow and therefore cannot take a job which would exert too much stress on it. They have a 1970 AMC Hornet which is necessary for the wife to go to and from her job and an old GMC pick up which is not operable. It therefore appears that before long the purchase of a new vehicle will be necessary. The bankruptcy schedules listed debts of $10,388.00. All but some $3,000.00 of this sum represents the student loans. The wife testified, however, that the reason for the bankruptcy was not to avoid payment of the student loans but to stop harassment by the other creditors, however, that they are not in a position to repay the student loans and would find it an undue hardship on themselves and the children.

Conclusions

In the case of In re Kirch, 4 BCD 680 (1978), the bankruptcy judge denied dischargeability of the student loan, but the defendant was in good health, single with no dependents, had no...