In re Mudd, 120920 NEBC, 19-40976

Docket Nº19-40976, Adversary 19-04048
Opinion JudgeSHON HASTINGS, JUDGE UNITED STATES BANKRUPTCY COURT
Party NameIn Re: Jamie Nichelle Mudd, Debtor. v. United States of America, acting through the United States Department of Education, Defendant. Jamie Nichelle Mudd, Plaintiff,
Case DateDecember 09, 2020
CourtUnited States Bankruptcy Courts, Eighth Circuit

In Re: Jamie Nichelle Mudd, Debtor.

Jamie Nichelle Mudd, Plaintiff,

v.

United States of America, acting through the United States Department of Education, Defendant.

No. 19-40976

Adversary No. 19-04048

United States Bankruptcy Court, D. Nebraska

December 9, 2020

Chapter 7

MEMORANDUM AND ORDER

SHON HASTINGS, JUDGE UNITED STATES BANKRUPTCY COURT

On October 3, 2019, Plaintiff/Debtor Jamie Nichelle Mudd filed this adversary proceeding seeking a determination that her student loan debt owed to Defendant United States of America, acting through the United States Department of Education (DOE) is dischargeable under 11 U.S.C. § 523(a)(8). DOE filed an answer on November 6, 2019, denying that Mudd is entitled to the relief requested.

The Court tried this case on October 21, 2020. This adversary action is a core proceeding under 28 U.S.C. § 157(b)(2)(I). The Court has jurisdiction under 28 U.S.C. §§ 1334 and 157, and it has authority to enter a final order in this matter. This opinion constitutes findings of fact and conclusions of law in accordance with Federal Rule of Bankruptcy Procedure 7052.

I. Findings of Fact

A. Education, Employment and Income

Mudd attended college in California, where she obtained associate degrees in culinary arts and medical science. With her associate degree in medical science, Mudd obtained employment as a certified medical assistant.1

Prior to moving to Nebraska, Mudd worked for Synergy Homecare as a live-in nurse, earning $13 an hour. At Synergy, Mudd cared for geriatric patients with Alzheimer's or dementia. Mudd lived with her patients in their homes and assisted them with dressing, cooking and cleaning. She also administered daily medication and attended doctor visits, if needed. Mudd's adjusted gross income in 2014 totaled $7, 389. Doc. 25.

Mudd moved to Nebraska in 2015.2 Upon arriving in Nebraska, Mudd obtained employment as a prep cook at a local Mexican restaurant and a deli cook at Super Saver. [3] Mudd worked at the Mexican restaurant six days a week from 5:00 a.m. to 1:00 p.m. and earned $9.50 per hour. At Super Saver, Mudd worked five days a week from 2:00 p.m. to 9:00 p.m. and earned approximately $10.15 per hour. On weekends, the University of Nebraska paid Mudd $11 per hour to serve snacks at a concession stand during volleyball and football games. She worked approximately 16 hours per week at this job. According to her 2015 tax return, Mudd earned $16, 491 in wages and $3, 270 in unemployment compensation with an adjusted gross income of $19, 761. Doc. 30.

The Court received no evidence regarding Mudd's income in 2016, but from 2017 to 2019, Mudd's wages increased by nominal amounts. Her tax returns reflect that her adjusted gross income totaled: 2017: $22, 548

2018: $25, 763

2019: $29, 189

See Docs. 57, 58, 59. 4 On her Statement of Current Monthly Income filed in June 2019, Mudd reported an annual income of $25, 848, roughly half the median family income for a household of one in Nebraska. Doc. 60 at 42.

Mudd currently works for HKT Teleservices5 as a customer service representative.6 Mudd works 40 hours per week and earns $12 per hour at this job. Since the pandemic began, Mudd works from home. Mudd testified that, at this time, she has no opportunity for overtime at HKT.7

Mudd also works for FedEx Ground as a package handler. Her responsibilities include scanning packages and loading them on trucks to be delivered. Mudd lifts packages that weigh 75 pounds or less. For packages over 75 pounds, Mudd must ask for assistance. This work requires Mudd to stand continuously. Mudd testified that she works two-and-a-half or three hours per day, six days a week at FedEx, but her time records show she averages approximately 13 hours per week. There is no opportunity for overtime at FedEx.

Sometime before trial, Mudd sought higher-paying jobs, [8] and she testified that she will continue to search for higher-paying jobs. In a few months, she will have three years of experience as a customer service representative. Mudd maintains that there are additional opportunities for higher-paying positions in the customer service field for those who have three or more years of experience. According to Mudd, she does not have the opportunity to apply for higher-paying positions at HKT. Mudd anticipates that she will work as a customer service representative until she retires. At the time of trial, Mudd was 50 years old.

Mudd's future employment with FedEx is limited, in part, due to the physical requirements of the job. Although Mudd testified she will continue to work at FedEx as long as her health allows, she does not think she will possess the physical ability to work for FedEx until she is 75 years old.9 Likewise, Mudd does not believe she will be physically able to work at two jobs until she is 75 years old. Accordingly, when asked whether she would continue to work at two jobs if she received a higher-paying customer service representative position, Mudd testified that instead of working a second job, she would put "more focus on my grandson."

B. Assets

Mudd owns no real estate; she lives in a one-bedroom apartment. Mudd listed her personal property on Schedule A/B and still owns most of this household property and electronics.10 All of her furniture is used.11 Mudd listed one MB Bank account on her schedules and holds no interest in other bank accounts. She does not have a retirement account, pension account, savings account or investments of any kind.

At the time she petitioned for bankruptcy relief, Mudd owned a 2002 Pontiac Montana with a number of mechanical issues. She traded the Pontiac and applied the $1, 000 she received toward the purchase of a used 2016 Nissan Rogue.12 Mudd financed the vehicle purchase with a five-year loan, requiring payments of $414.65 per month. Mudd also pays $161.62 per month for vehicle insurance. Other than the Nissan Rogue, Mudd has not acquired any additional assets not listed on her bankruptcy schedules.

C. Liabilities and Expenses

In November 2019, Mudd's 17-year-old grandson, who has a mild form of autism, began living with her. Mudd's grandson is not employed, and he does not have a driver's license. Mudd does not receive any financial assistance from either his mother or father, both of whom are unemployed.

Mudd obtained temporary guardianship of her grandson, allowing her to enroll him in school. She has not yet applied for Social Security benefits to defray some of the expenses she is incurring to care for her grandson. Mudd was uncertain (and the evidence did not show) whether the "temporary guardianship" granted to Mudd would allow her to apply for such benefits on his behalf.

Mudd enrolled her grandson in a Nebraska high school, where he attends both in-person and virtual classes. Mudd's grandson, who is a junior, participates in virtual classes from Mudd's one-bedroom apartment. Because Mudd also works from home, her grandson attends class from the bedroom while Mudd works in the living room. Mudd testified that she has considered renting a larger apartment, but she cannot afford it.

Mudd testified that she is trying to keep her grandson focused on staying in school and completing his homework. Due to his autism, Mudd's grandson is easily agitated. To keep him occupied while she works, Mudd allows him to play games on his phone, watch Netflix and use other internet services. She testified that she is searching for a counselor to assist her with his care. Because of her grandson's disability, Mudd anticipates that she will continue to care for him after he graduates from high school and becomes an adult.

On Schedule J, Mudd listed monthly expenses totaling $2, 064, just $24.44 less than her monthly net income. At trial, she offered evidence showing that her expenses are higher than listed, partly due to the cost of caring for her grandson.

Schedule J Other Trial Evidence
Rent $510
Home maintenance repair, upkeep $100
Electricity, heat, gas $35 higher due to work/school at home (no specific sum offered)
Cell phone, internet, cable $189 additional $112.51/month, [13] less cable which Mudd no longer receives
Food & housekeeping $350 additional $50/month[14]
Childcare and children's education costs $0 Mudd purchases school supplies for her grandson (no specific sum offered)
Clothing, Laundry $40 additional $20/month due to grandson; Mudd rarely buys clothes for herself
Personal care products and services $40
Medical and dental $200 Based on Mudd's testimony about her health, this expense will continue to rise. The medication costs she incurs for chronic conditions total $152/month and other related costs total $330/month.[15] Sometimes she forgoes purchasing medication she needs because it is expensive. When Mudd purchases all required medications and attends all medical appointments, she incurs $482/month in medical expenses. Subtracting the $200/month expense she estimated on Schedule J, her additional monthly medical expense totals $282/month.
Transportation $250
Entertainment $0 $140/month for cigarettes and alcohol
Health Insurance $250 $60/month for health insurance premium ($190/month less than Schedule J estimate)
Vehicle Insurance $100 $61.62/month additional cost; Mudd expects this sum to decrease after a year of consistent payments
Car payment -- $414.65/month for 5 years
Total $2, 064.00 $890.78 additional monthly expenses
Additionally, Mudd must make payments toward the following debts she accumulated after bankruptcy: Tax debt -- Mudd...

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