Undue Hardship Essay

look up the case and write a one page essay about what did the court appeal rule and define the undue hardship in the following case.

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United States Court of Appeals, Tenth Circuit.
EDUCATIONAL CREDIT MANAGEMENT CORPORATION, assignee of USA Group
Loan Services, Inc., Defendant-Appellant, v, Nancy Jane POLLEYS, Plaintiff-
Appellee.
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No. 02-8059.
Decided: February 04, 2004
Before KELLY, HENRY, and LUCERO, Circuit Judges. Submitted on the briefs: * Scott M. Browning and Craig
R. Welling, Rothgerber, Johnson & Lyons, LLP., Denver, CO, for Appellant. Stephen R. Winship, Winship &
Winship, P.C., Casper, WY, for Appellee.
Plaintiff-Appellee Nancy Jane Polleys sought a bankruptcy court discharge of federally guaranteed student
loans. Defendant-Appellant Education Credit Management Corporation (ECMC) is a non-profit company
and fiduciary of the Department of Education that is charged with collecting such loans. It now holds these
loans. Ms. Polleys initiated an adversary proceeding in bankruptcy, contending that the loans were
dischargeable because payment of them would impose an undue hardship within the meaning of u U.S.C. $
523(a)(8). The bankruptcy court agreed and discharged the loans. The district court affirmed. ECMC DOW
appeals. We have jurisdiction pursuant to 28 U.S.C. $ 1291 and we affirm.
Background
At the time of trial, Ms. Polleys was a 45-year old single mother of a teenaged girl. In 1993, she obtained a
degree in accounting financed with student loan funds. She has not repaid any amount on these loans. Her
loans were later consolidated, and at the time of trial had a balance of approximately $51,000; repayment
would require $420 per month over a period of 20 years. Aplt.App. 187.
Ms. Polleys was previously employed as an accountant. In 1994, she worked for one year in that capacity and
earned $33,000. She had a job in public accounting in 1997, earning $13.771. According to Ms. Polleys, she
was laid off from that job when the employer realized she was taking antidepressant medication and she asked
for too much help. Ms. Polleys also tried self-employment, but could only get small bookkeeping jobs that
paid less than $400 per month
Since 1997, Ms. Polleys’s annual income has been as high as $16,000 and as low as $3,000. Through August
2000, she earned minimum wage while employed at a greenhouse until she was laid off. Recently, Ms.
Polleys and her daughter have lived on about $9,800, obtained from child support and two or three part-time
jobs. Ms. Polleys receives $400 per month in child support payments.
Ms. Polleys and her daughter live in a rental property owned by her parents and pay no rent or utilities. She
has a 1993 Subaru, which has significant body damage, but owns very little other property and no real
property. Her budget contains no funds for emergencies. She qualifies for food stamps, and her income is
below the federal poverty guidelines, as it was in the year before trial. Aplt.App. at 48, 128-29. Although her
daughter is eligible for Medicaid, Ms. Polleys herself has no health insurance. She expects to receive
unemployment compensation at some point in the future.
Ms. Polleys is apparently in good physical health, but she has been diagnosed with and continues to suffer from
a psychological condition known as “cyclothymic disorder. She was once involuntarily committed.
Aplt.App. at 32, 168. Ms. Polleys is currently prescribed Serzone, an antidepressant, twice a day. Aplt.App.
at 132. Her mental health condition also apparently resulted in a suicide attempt. Aplt.App. at 24-27, 30-31,
159. She has ongoing expenses for her various medical and psychological conditions. Aplt.App. at 132-32.
On appeal, ECMC argues that the district court and the bankruptcy court not only selected the wrong standard
for an undue hardship discharge, but also applied it incorrectly. Rather than relying upon a “totality of the
circumstances test, ECMC argues that the courts should have looked to the three-nart test in Branner v. New
York State Higher Education Services Corp., 831 F.2d 395, 396 (ad Cir.1987), and concluded that Ms. Polleys
was not entitled to a discharge.
Discussion
Section 523(a)(8) provides that an educational loan is not dischargeable in bankruptcy unless “excepting
such debt from discharge. Will impose an undue hardship on the debtor and the debtor’s dependents.” While
this court is obliged to accept the bankruptcy court’s undisturbed findings of fact unless they are clearly
erroneous, we review de novo conclusions as to the legal effect of those findings. United States v. Richman
In re Talbot), 124 F.3d 1201, 1206 (loth Cir.1997). Whether a debtor’s student loans would impose an
“undue hardship under u U.S.C. & 523(a)(8) is a question of law. Woodcock v. Chemical Bank, NYSHESC
(In re Woodcock), 45 F3d 363, 367 (10th Cir.1995). It requires a conclusion regarding the legal effect of the
bankruptcy court’s findings as to the debtor’s circumstances, and is therefore reviewed de novo. Id.; see also
Long v. Educ. Credit Mgint. Corp. (In re Long), 322 F 3d 549, 553 (8th Cir.2003) (collecting cases).