STATEMENT ABOUT THE DISTRICT COURT DECISION FILED ON SEPTEMBER 29, 2021(SDNY 20-CV-00688 (PMH)
From the headlines announcing this decision you would think that the judge had thrown out my victory against the student loan industry but for the sake of all those suffering under crushing the weight of student loan debt they can never repay, thankfully you would be wrong. The journalists covering the case apparently never read the text of the decision and only one reached out for comment. After reading articles filled with factual and legal inaccuracies, I reached out to a few journalists and one apologized saying that he had written the article with a time crunch deadline. Though headlines draw clicks I would have hoped that more journalists remained rooted in fact based articles.
The truth is that Judge Halpern essentially took a pass on the case and essentially decided nothing. His decision is neatly summarized on page 17 of his opinion where he states, “Based upon the Court’s de novo review, neither Plaintiff nor Defendant has established their entitlement to summary judgment under the Brunner test in the Adversary Proceeding.” He doesn’t rule in favor of the Defendant (ECMC) as many articles imply, he essentially doesn’t make a decision and throws it back down to the bankruptcy/trial court to reaffirm its decision.
Though there were some factual inaccuracies in Judge Halpern’s opinion – Stating that I introduced testimony from the employment expert hired by the Defendant, ignoring the reality of brick & mortar retail, and overlooking the amount I had repaid towards my private loans – he also introduces new arguments that were never made by the Defendant. Since there was no factual dispute about my debts or income this element of the Brunner Test was already settled yet Judge Halpern creates a dispute where none exists.
For those of you unfamiliar, district court judges such as Judge Halpern are trial judges and are not typically involved with appeals. The exception is that in bankruptcy court the losing party has the option of appealing to either a Bankruptcy Appeals Panel (BAP) made up of experienced bankruptcy judges, or to a single district court judge with no experience handling bankruptcy cases.
After losing on summary judgment, which means that the facts were so against them the judge decided a trial wasn’t even necessary, Defendant ECMC chose to appeal to the district court. It is my belief that they chose this course of action knowing that if they prevailed it would constitute more of a PR victory than an actual legal victory – The first real level of appeal won’t happen until the case reaches the 2nd Circuit Court of Appeals – and would have a chilling effect on debtors seeking to discharge their student loans in bankruptcy. Based on the desperate messages I’ve received from those suffering under this heavy handed system they were unfortunately correct.
Since Judge Halpern is a Trump appointee and new to the bench, we expected this result and knew that it was simply a delay/PR tactic of ECMC. The truth is that it will likely be another 2-3 years before the case is reviewed by the 2nd Circuit Court of Appeals, and another 1-2 years after that before it can be heard by the Supreme Court.
Until the Supreme Court is able to review the case my “David v. Goliath” victory still stands, though its enforcement is on a temporary hold. If you are one of the millions of hard working Americans being crushed by student loan debt you can never repay, if you are the victim of bait & switch programs that claim to make it easier for you to repay your loans while running up the amount you owe, if your efforts to better yourself and provide a better life for your family have turned you into an indentured servant, I urge you to look into filing for bankruptcy to discharge your student loan debt.
The simple truth is that the tide is turning against the banking industry and they are trying to intimidate you from seeking the relief you are entitled to. Don’t be afraid, stand up and take back your life!