In re Mosley, Bankruptcy No. 99-78810-CRM.

CourtUnited States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Northern District of Georgia
Writing for the CourtC. Ray Mullins
Citation330 B.R. 832
PartiesIn re Keldric Dante MOSLEY, Debtor. Keldric Dante Mosley, Plaintiff, v. General Revenue Corp., U.S. Department of Education, Alcorn State University, Educational Credit Management Corporation, Defendants.
Docket NumberAdversary No. 04-9139.,Bankruptcy No. 99-78810-CRM.
Decision Date25 August 2005

Keldric Dante Mosley, East Point, GA, pro se.

Thomas W. Joyce, Jones, Cork & Miller, LLP, Macon, GA, for Educational Credit Management Corp.


C. RAY MULLINS, Bankruptcy Judge.

THIS MATTER is before the Court on the Complaint to Determine Dischargeability of Student Loan (the "Complaint"), filed on August 12, 2004. On July 20, 2005, a trial was held and the Court ruled that the Debtor's student loan obligations to Defendant Educational Credit Management Corporation ("ECMC") would be discharged pursuant to section 523(a)(8) of the Bankruptcy Code. On July 21, 2005, the Court entered a short order declaring that, for the reasons stated on the record, the Debtor is granted an undue hardship discharge and the debts owed to ECMC are dischargeable. The Court reserved the right to enter supplemental findings regarding this matter. Accordingly, this Order supplements the record.

The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334(b), as well as Rule 1070-1 of the Local Rules of Practice for the United States Bankruptcy Court for the Northern District of Georgia. This is a core proceeding under 28 U.S.C. § 157(b)(2)(I).

The issue before the Court is whether the Debtor, who is and has been homeless for several years and suffers from various physical and psychological ailments, is entitled to receive a discharge of his student loans. The Court holds that the Debtor has established, by a preponderance of the evidence, his entitlement to relief under section 523(a)(8) and the Brunner test. The Debtor has demonstrated that he cannot currently maintain a minimal standard of living even without the repayment of his student loans, he suffers from serious and ongoing physical and psychological disabilities which make it unlikely that he will have the ability to repay student loans in the future, and he has lacked funds to make any payments in the past.


The Debtor, proceeding pro se, filed a petition for relief under chapter 7 of the Bankruptcy Code on December 21, 1999. On May 15, 2000, the Court entered the Order Discharging Debtor(s), Approving Account, Discharging Trustee, and Closing Estate (Doc. No. 20), and the case was closed shortly thereafter. On May 5, 2004, the Debtor filed the "Complaint to Reopen Bankruptcy Case and to Cease All Collection Activities, Including Garnishment of Federal Income Taxes" (Doc. No. 22), which the Court construed as the "Motion to Reopen." On August 12, 2004, a hearing was held on the Motion to Reopen, and the Court granted the relief requested, reopening the case to allow the Debtor to file an adversary proceeding. The above-styled adversary proceeding was commenced on August 12, 2004.

The Debtor seeks a discharge of several student loans he incurred while attending Alcorn State University ("ASU"). According to the National Student Loan Data System, it appears that the Debtor had obtained several loans, including six Stafford Loans, through the Federal Family Education Loan Program in the approximate amount of $45,000.00.1 The loans were previously held by U.S.A. Funds and then were eventually transferred to ECMC. The Debtor, the first member of his family to go to college, attended ASU from the fall of 1989 until the spring of 1994. A history major, the Debtor testified that he was not awarded a bachelor's degree, as he needed to complete an additional five or six courses to graduate.

During his first semester at ASU, the Debtor joined the U.S. Army Reserve Officers' Training Corps ("ROTC"). In the summer of 1993, the Debtor was training for service in the Persian Gulf when he was involved in a debilitating accident. The Debtor testified that he fell off a tank, severely injuring his hip and his back.2 Although the Debtor had completed his ROTC program, he resigned his commission because he felt that he was not healthy enough to attend officer school. Subsequently, the debtor was honorably discharged from the Army and left ASU to return to Atlanta.

The Debtor lived with his mother until 1999. He testified that during this time, his physical and mental condition "deteriorated," as he was depressed and drank heavily. The Debtor tried to return to college to obtain his degree but he could not receive the needed financial aid because his prior loans were in default. He then enrolled in a course at a heavy equipment school, but had difficulty learning the trade. Despite his efforts, the Debtor could not maintain employment. He held several different jobs. In particular, he was employed in unskilled labor positions for the United States Postal Service, the Bureau of Solid Waste of the City of Atlanta Department of Public Works, Hartsfield-Jackson Atlanta International Airport, and a moving company, and stated that the manual labor aggravated his back and hip injuries. The Debtor did receive worker's compensation for additional bodily trauma he suffered while working for the moving company.

The Debtor testified that his family did not understand his predicament, especially his emotional state and persistent unemployment. In January of 2000, the Debtor's mother evicted him from her home and had him involuntarily committed to Georgia Regional Hospital, a state supported facility that provides mental health services for those suffering from psychological disabilities. According to the Debtor's testimony, he was diagnosed with depression and an anxiety disorder. Though he had been in denial of these mental illnesses, after his release from the hospital he sought treatment through the Department of Veterans' Affairs (the "V.A."). He also sought medical care for his chronic back problems.

The Debtor continues to receive treatment from the V.A.'s mental health facility. He testified that since 2001, he has been taking prescription medication for his depression. The Debtor has also been prescribed four different drugs for his back pain and high blood pressure. Further, the Debtor receives physical therapy for his back. The Debtor stated that he often experiences acute discomfort due to his back injury, and he is still affected by his psychological disorders. According to several exhibits admitted into evidence during the trial, the Debtor suffers from chronic lower back pain with radicular component, depression, anxiety, hypertension, and high blood pressure and adjustment disorder with anxiety and dysthmia. See Plaintiff's Exhibits 1E and 1F.

The Debtor asserts that these ailments have adversely impacted his employment. He has not been steadily employed since July of 2003. Although the Debtor has not provided specific detail regarding his income, the Court will note that it is very minimal since the Debtor cannot afford life's basic necessities.3 According to the Debtor's Social Security Earnings Statement, the Debtor has not earned more than $7,770.00 since 1994. See Plaintiff's Exhibit 2A. The following chart sets forth his past earnings:

                        Taxed Social             Taxed Medicare
                Year    Security Earnings           Earnings
                1994    $3,682.00                   $3,682.00
                1995    $6,929.00                   $6,929.00
                1996    $7,770.00                   $7,770.00
                1997    $?  12.00 (illegible)       $1,287.00
                1998    $1,816.00                   $1,816.00
                1999    $3,641.00                   $3,641.00
                2000    $4,333.00                   $4,333.00
                2001    $4,472.00                   $4,472.00
                2002    $2,596.00                   $2,596.00
                2003    $3,599.00* (estimated)
                2004    unreported as of date
                          of statement

The Debtor testified that his monthly income is $210.00 from disability compensation provided by the V.A.4 He also receives food stamps from the Georgia Department of Human Resources. Currently, he is registered with the Georgia Department of Labor in an effort to find employment. He has been homeless since he was evicted from his mother's home. The Debtor explains that he stays with different friends or family members every night. During the day, he travels to labor pools in search of work or spends time in parks or libraries. He owns virtually no property. The Debtor cannot even afford a car of any type. The Debtor, now thirty-four years old, has testified that he is doing the best he can to support himself. He admits that he has not made payments on his student loan obligations, which have been in default since July of 1996.5


In the Complaint, the Debtor argues that, given his current income he cannot maintain a minimal standard of living and repay his student loans. He also claims that he made a good faith effort to repay his debts.

ECMC asserts that this has been a difficult case due to lack of discovery regarding the Debtor's medical conditions and employment history.6 ECMC contends that the Debtor has not shown that he has a disability and cannot work due to a disability. ECMC further alleges that the Debtor failed the Brunner test due to a lack of evidence, particularly in regards to his medical diagnosis and prognosis.


Courts generally afford pro se litigants special consideration. In Haines v. Kerner, the Supreme Court held that the pleadings of pro se litigants are subject to "less stringent standards than formal pleadings drafted by lawyers." 404 U.S. 519, 520-21, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972) (citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Dioguardi v. Durning, 139 F.2d 774 (2d Cir.1944)) (per curiam). Following the Supreme Court's ruling, the majority of courts liberally construe pro se...

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