Tetzlaff v. Educational Credit Management Corp.

Bankruptcy Ct. did not err in denying debtor’s request to discharge $260,000 in student loan debt as part of debtor’s Chapter 7 bankruptcy petition, even though debtor, who was 56 years old and unemployed, argued that repayment of said amount would constitute undue hardship. Student loans are generally not dischargeable in bankruptcy, and debtor failed to show that his current inability to pay on student loans would likely persist over significant portion of instant repayment period, where: (1) Bankruptcy Ct. noted that debtor had MBA degree, was good writer and was able to earn living; and (2) record suggested that debtor was feigning psychological problems. Ct. further found that debtor failed to establish good faith element of applicable dischargeability test, where debtor favored certain creditors over others when making prior payments on his debt.