Compassion and Common Sense Enter Student Loan Discharge Arena

Where there was sufficient evidence to corroborate the debtor’s credible testimony of medical disability indicating likelihood of her inability to work in the future, the second prong of Brunner is satisfied even though there may be more or better corroborating evidence the debtor could have presented. Nightingale v. North Carolina State Educational Assistance Authority, 2016 Bankr. LEXIS 1667, No. 13-10834, Adv. Proc. No.13-2060 (Bankr. M.D. N.C. April 14, 2016).

The debtor, Alice Nightingale, 67 years old, suffered from “intractable foot pain,” hypothyroidism, obstructive sleep apnea, and chronic fatigue, all of which had worsened over the course of her chapter 13 bankruptcy, and which prevented her from engaging in employment and from taking part in many activities of daily living. She was granted full disability from her teaching job by the County School Board where she had been employed. In a hearing in October, 2015, the court found Ms. Nightingale had established the first and third prongs of the Brunner test (Brunner v. New York State Higher Educ. Servs. Corp., 831 F.2d 395 (2d. Cir. 1987)), with evidence that she had attempted to repay the student loan, that she was “elderly” and unlikely to find future employment and that she suffered from significant medical problems. It found however that, although Ms. Nightingale’s testimony concerning her medical disabilities was credible, objective corroboration was necessary to satisfy the second prong of the Brunner test.

Over the lender’s objection, the court held a second hearing in which Ms. Nightingale presented medical documents tending to corroborate her testimony, including letters to Ms. Nightingale’s attorney from two of her doctors, a medical report for disability eligibility, and a physician-provided list of Ms. Nightingale’s current prescriptions. The lender challenged the evidence as failing to present current medical testing and evaluations and arguing that it did not “conclusively” prove that her health would not improve such that she could return to work.

This hearing addressed the second prong of the Brunner test: whether there existed “additional, exceptional circumstances, strongly suggestive of continuing inability to repay [the debt] over an extended period of time.” While the court agreed with the lender that Ms. Nightingale could have presented evidence of recent tests and evaluations, it found that it was not necessary that she “provide every possibly available piece of evidence that could further corroborate the unrebutted evidence in this case.” Where the purpose of corroborating evidence is to prevent fabrication, exaggeration or fraud, the court found that the evidence provided by Ms. Nightingale met that goal, particularly where, as here, the lender did not accuse her of any such deception. “A likely insurmountable burden would arise if an impoverished and allegedly diminished capacity debtor were required to present exhaustive medical evidence and medical testimony, especially in the face of unrebutted and corroborated evidence of eight years of debilitating illness.”

The court concluded: “Taking into consideration the Plaintiff’s age, current living situation, inability to walk or stand for long periods of time, chronic fatigue, lack of stamina, lack of strength, diminished cognitive ability, and the likelihood that these conditions will all last for a significant period of her possible repayment period given her age and the duration of her illnesses, the Plaintiff has demonstrated that exceptional circumstances exist in this case and has met the second prong of the Brunner test.”

Nightingale Bankr MD NC opinion April 2016