Schuckman v. U.S. Dep't of Educ. (In re Schuckman), Case No. 17-10834

Decision Date28 May 2019
Docket NumberAdv. No. 17-5130,Case No. 17-10834
CourtU.S. Bankruptcy Court — District of Kansas


Chapter 7


Student loan debts are not discharged in chapter 7 cases unless the debtor proves undue hardship by showing three things: an inability to make even minimal loan payments without compromising a minimal standard of living; that the inability to repay will persist into the future; and that debtor has made good faith efforts to repay the loan. When Daniel Schuckman filed this case, he owed $230,587 in student loan debt accumulated over nearly twenty years while he pursued and received bachelor's degrees in psychology and nursing, and a master's degree in counselling. Mr. Schuckman, a father of two teens, works as a nurse, but less than full time so he can preserve the flexibility to attend to one child's medical problems and accommodate his chronic back pain. He has made no payments on his loan, nor has he elected to use any of the repayment plans provided by the Department of Education (DOE) to facilitate payment. Because Mr. Schuckman could make at least the minimum income driven repayments on this debt and has employment potential that belies persistent undue hardship, his student loan debt cannot be discharged.1

Findings of Fact
Personal Background and Employment

Daniel Schuckman completed his higher education in 2015 when he received his master's degree and began working as a registered nurse in the Lawrence area. He is 42 and a single father of a 15- and 18-year-old. The older child has mental health concerns and, though presently not in school, is only one year from completing high school. Mr. Schuckman suffers from chronic back pain that hetreats with medication, though he cannot take pain medication while on the job. Though he offered no outside medical evidence about the extent of his back problems, he presented a billing record showing that he'd undergone an interlaminar injection for pain in August of 2018.2 Mr. Schuckman also stated doctors have told him he has a herniated disc. He states his pain is getting progressively worse, negatively affecting his ability to work and otherwise function.

When this case was tried, Mr. Schuckman was exclusively employed as a "PRN" nurse in the intensive care unit at Lawrence Memorial Hospital. "PRN" means "as needed," and in the employment context, it means that Mr. Schuckman is called in when the hospital needs him as opposed to having a full-time equivalent (FTE) position. He gave up his FTE status to earn a higher hourly wage and also to have more flexibility to deal with his older child's health problems. Were he to be a full-time employee, he would be assigned shifts that he couldn't drop without risking his employment. As a PRN nurse, he can work when he is able, but the trade-off is that he lacks any meaningful guarantee of hours. On occasion, he has declined to work hours offered to him. When the hospital's census is low, he works less and, in 2018, he worked fewer than 30 hours per week on average. Though he reported income of over $63,000, he lost group medical coverage in January of 2019 because of his low hours, and purchased individual coverage on the healthcare exchange.3 While his premium is significantly less, the new coverage has higherdeductibles than his former group plan, although Schuckman didn't specify those amounts. Schuckman projects his annual income will be around $59,000 in 2019 based upon his most recent paystub.4

The elder child's mental health remains in question. According to debtor's testimony, his daughter has undergone various forms of mental health therapy and counselling since 2014 or 2015. She has completed her junior year of high school, but isn't presently enrolled in school. Debtor estimated that in 2018, he incurred medical expenses of $3,000 dealing with his daughter's mental health issues, but only provided 2019 bills or receipts, leaving no support for any 2018 claims.5 Despite having reached the age of majority, the child remains dependent on Mr. Schuckman and suffers sporadic episodes that require his presence and intervention. Mr. Schuckman did not know whether his exchange medical coverage would cover mental health counselling or other therapy.


Mr. Schuckman began his college education in 1995 at the University of Kansas, studying psychology. He appears to have funded nearly all of his education with student loans. He attended Kansas for one year, was out of school from 1996 to 2000, then re-entered Kansas, studying there until spring of 2002. He borrowed $23,757 to finance his time at Kansas.6

He entered Washburn University in the fall of 2002, graduating with a Bachelor of Arts degree in psychology in December of 2005. He borrowed $33,428 to pay for his time at Washburn.7 He consolidated his Kansas and Washburn loans in April of 2007, by then owing $52,139.8 There was no evidence about what he did for the next year or so, but he entered St. Edward's University in Austin, Texas in August of 2009 and remained there through the fall semester of 2012, engaged in studies in "major counselling" to obtain a Master of Arts degree. During this period, he borrowed $67,855 for tuition and living expenses.9 He testified that he'd moved to Austin with his then-wife and the children and took several of these loans to provide for living expenses.10

Schuckman returned to northeast Kansas in 2013, enrolling in Mid-America Nazarene University in Olathe to earn a nursing degree. He completed that degree in December of 2013, borrowing another $14,797 in the process.11 He testified thathe wanted to be closer to his family in Johnson County after his marriage broke up. Before entering the workforce as a nurse, he completed the remaining course work at St. Edward's to receive his counselling degree in the spring of 2015. He borrowed another $27,241 in the process.12

In late October of 2015, Mr. Schuckman applied to consolidate all of his student loan debt.13 That application was approved, and two consolidated loans dated December 4, 2015 were issued; the balances on these consolidation loans as of the date of his bankruptcy petition, May 10, 2017, were $160,757 and $69,830.14 These amounts include capitalized interest. On the same date as his online application and as part of the consolidation process, Schuckman was required to also complete an online Repayment Plan Request.15 Because he did not select a repayment option, by default the loan servicer automatically places the debtor in the lowest monthly repayment option, usually an Income-Driven Repayment (IDR) plan.16 Schuckman made inquiry about IDR nineteen months after he filed bankruptcy.17

Finances, Budget, and Standard of Living

Over the past three years, Mr. Schuckman has worked as many as three jobs at a time, but from 2018 on, he has worked exclusively at Lawrence Memorial Hospital. All of his jobs were nursing jobs; he no longer works as a "call" nurse which involves participating either in home health care or filling in at different hospitals in Northeast Kansas. In 2015, he reported $48,073 gross income and received an income tax refund of $3,500.18 In 2016, he reported $58,342 in gross income and received a tax refund of $1,286.19 In 2017, he grossed $62,017 and received a tax refund of $1,145.20 In 2018, he grossed $63,982 and received a tax refund of $3,492.21 His children receive several hundred dollars monthly as Social Security Disability Income from their mother who is apparently unable to work. Based on his most recent 2019 paystub, Mr. Schuckman projected that he would gross about $59,000 this year and suggested that he would be unable to work more hours because of his back pain and his daughter's mental health.22

The DOE introduced a series of Schuckman's bank statements reflecting many expenditures for fast food or eating out, sometimes as much as $700 per month in addition to grocery expenses.23 The DOE also noted that Schuckman acquired a new vehicle shortly before filing this case and makes a car payment of$445 per month. Debtor's schedule J reflected total monthly expenses of $3,486, some of which have been adjusted upward since filing. This amount includes a food budget of $680; by comparison, the debtor's actual fast food, restaurant and grocery expenditures in November of 2017 were over $1,400.24

Mr. Schuckman stated that he had dropped cable TV and reined in his dining expenses, but he noted that he is often too tired or that his back hurts too much to cook after work and he believes that purchasing fresh groceries is just as expensive as dining out or getting takeout food. Otherwise, Mr. Schuckman believes his life prospects are bleak and that he suffers from depression and feelings of hopelessness as a result of the debts he owes, his physical and work limitations, and his daughter's illness.

If Mr. Schuckman remains employed at LMH under his current terms, he can expect to gross $59,000 or an average of $4,916 per month.25 If we assume that 16% of this is withheld as taxes (the approximate percentage withheld on his Schedule I), his net monthly income would be $4,129.26 His Schedule J expenses modified according to his trial testimony, and with the expectation that Schuckman adhere more closely to his $680 monthly food budget, would amount to about $3,751. This leaves him $378 in monthly disposable income before considering any tax refundshe might receive. He makes a $445 monthly car payment that will end in about three years, freeing up more disposable income.

Employment and Family Prospects

Mr. Schuckman testified that he could not work outside Lawrence. His younger child is happy there and likes the school and neighborhood setting. He does not wish to uproot his children at this time. He did not state why he couldn't work in Topeka, 25 miles west of...

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