United States District Court, W.D. North Carolina, Charlotte Division
MAX O. COGBURN, District Judge.
THIS MATTER is before the court on the appeal of Genierose Diola Magsino ("Appellant") from an order of the United States Bankruptcy Court granting summary judgment in favor of the United States Department of Education ("Appellee") granting summary judgment in favor of appellee. In granting such motion, the bankruptcy court determined that appellant's government-backed student debt is non-dischargeable. As in the bankruptcy court below, appellant is proceeding pro se on her appeal. This Court has jurisdiction to hear the appeal pursuant to 28, United States Code, Sections 158(a)(1) and 1334. For the reasons that follow, the court dismisses the appeal and affirms the determination of the bankruptcy court.
On this appeal, appellant presents the following issues:
I. Whether the Bankruptcy Court erred in granting summary judgment against appellant's adversary proceeding which sought an undue hardship discharge for her student loans?
II. Whether the standards in Brunner v. New York State Higher Educ. Servs. Corp. , 831 F.2d 395, 396 (2nd Cir. 1987), are inconsistent with the Thirteenth Amendment's prohibition against involuntary servitude?
Thus, the key issue before the court is whether appellant's government-backed student loan debt is dischargeable.
On appeal, the court "may affirm, modify, or reverse a bankruptcy judge's judgment, order, or decree or remand with instructions for further proceedings." Fed.R.Bankr.P. 8013. District courts exercise de novo review over an appeal of a decision issued by the bankruptcy court, "effectively standing in its shoes to consider directly the findings of fact and conclusions of law by the bankruptcy court." Cypher Chiropractic Ctr. v. Runski (In re Runski) , 102 F.3d 744, 745 (4th Cir. 1996); Bowers v. Atlanta Motor Speedway, Inc. (In re Southeast Hotel Props. Ltd. P'ship) , 99 F.3d 151, 154 (4th Cir. 1996) ("Findings of fact are reviewed for clear error, and conclusions of law are reviewed de novo" (citation omitted)).
Accordingly, this court reviews "legal conclusions by the bankruptcy court de novo and may overturn its factual determinations only upon a showing of clear error." Morris v. Quigley (In re Quigley) , 673 F.3d 269, 271 (4th Cir. 2012); accord Terry v. Meredith (In re Meredith) , 527 F.3d 372, 375 (4th Cir. 2008). The proper construction and interpretation of the Bankruptcy Code is a question of law subject to plenary review. Runski , 102 F.3d at 745.
In providing for relief for debtors under the Bankruptcy Code, Congress determined that the code would not provide for automatic discharge of government-backed student loans. Specifically, Title 11 U.S.C. § 523(a)(8) states, in pertinent part, that a "discharge under section 727... of this title does not discharge an individual debtor from any debt - (8) for an educational... loan made, insured or guaranteed by a governmental unit...." 11 U.S.C. § 523(a)(8). Such provision does, however, allow for discharge where the non-discharge would "impose an undue hardship on the debtor and the debtor's dependents...." Id . Inasmuch as the statute creates a presumption that government-backed educational debts are non-dischargeable, United States v. Wood , 925 F.2d 1580, 1583 (7th Cir. 1991), the burden to establish dischargeability remains on appellant in this appeal de novo .
To be entitled to a Section 523(a)(8) discharge, a debtor must show "undue hardship." To discharge a government-backed student loan, a debtor must show that "unique' or extraordinary' circumstances... render it unlikely that the debtor would be able to honor... [student loan] obligations." In re Love , 33 B.R. 753, 754-55 (Bankr. E.D.Va. 1983) (citation omitted). Undue hardship is more than the unpleasantness of repaying a loan, id. at 754, or the lack of success in obtaining a degree or a career the student believed would result after incurring the debt. In re Roberson , 999 F.2d 1132, 1136-37 (7th Cir. 1993). Put ...