HELP! Clock is Ticking -- ADVERSARY PROCEEDING!!!

[TurnThePage]

You're missing the part of the Income Based Repayment where the balance due is forgiven, after a certain period in the plan (25 years, if I recall correctly).

If I were the judge, I may ask how a $0 payment poses an undue hardship.

Hi jadams:

Don't forget the Tax Liability on the discharged amount, too. Hence, not only is it unrealistic to keep a student loan on the books for years & years with $0 payments, with the balance growing larger and larger, but "undue hardship" still exists when it is written off outside of Bankruptcy!

[HHM]

Well, if you are going to go it alone and merely rely on exhibits, go get the book
Evidentiary Foundations, by Edward J Imwinkelried. At least you will learn how to admit your exhibits as evidence and be able to fight the DOE's Motion's to exclude your evidence for lack of proper foundation.

[jadams]

Hi jadams:

Don't forget the Tax Liability on the discharged amount, too. Hence, not only is it unrealistic to keep a student loan on the books for years & years with $0 payments, with the balance growing larger and larger, but "undue hardship" still exists when it is written off outside of Bankruptcy!

Please understand I wish you luck with your pleading. I am just presenting the counter arguments as I see them, so you are at least prepared to respond should they be raised by the DOE. Everything I've seen suggests this is a very very difficult thing to attempt.

Hypothetically if your situation is indeed permanent and you're stuck with just your SSDI for 25 years, I would question whether the math works out so that with 25 years of compounding interest due to $0 payments you are almost guaranteed to be insolvent according to the IRS at the time of cancellation (thus having no tax liability on the cancelled debt).

Maybe that itself adds to your undue hardship (i.e. the court basing their logic on you being IRS insolvent in 25 years), I don't know.

[TurnThePage]

I was just about ready to move in for Default Judgment when I received the U.S. Department of Education's Answer, right @ the last minute! They filed it electronically with the court on the 35th day after issuance of the Summons.

Basically the U.S. Attorney went through my Complaint & made a general denial of each numbered paragraph, but also added a separate page titled "Affirmative Defenses .." They contend that I have "failed to exhaust my administrative remedies" through the Department of Education first. While I have examples of Court Cases which refute this point, I'm confused by the next part which states how "I have failed to state a claim upon which relief can be granted??" Does this mean a claim specifically to the Department of Education, or the Court? I thought I made myself crystal clear in my Complaint, but perhaps I just have to "prove it."

Also, does anyone know how the Plaintiff can Answer the Defendant's Answer? The Defendant's "prayer for relief" asks for attorney fees, so can I deny this, and counter asking "all parties to bear their own costs?"

Any advice or suggestions will be greatly appreciated, thanks.

[HHM]

Those are boilerplate affirmative defenses.

You do not need to reply to the complaint unless it actually contains a counter-claim (but it sounds like all they did was assert affirmative defenses).

Welcome to litigation. As the moving party (the plaintiff), you now need to do your initial disclosures. See Federal Rule of Procedure 26 and schedule a pre-trial conference. Your into the phase that you will probably get taken advantage of by the opposing attorney.

Good luck.

[justbroke]

Welcome to litigation. As the moving party (the plaintiff), you now need to do your initial disclosures. See Federal Rule of Procedure 26 and schedule a pre-trial conference. Your into the phase that you will probably get taken advantage of by the opposing attorney.

Yep. I'd be reading up on the Federal Rules of Evidence and Federal Rules of Civil Procedure in general, not just Rule 26.

Looks like TurnThePage definitely needs to schedule a conference since the answer is in. Should be interesting, to say the least.

[TurnThePage]

Pre-Trial Conference

LOL Well the date was already set for a Pre-Trial Conference by the Court; this was included in the Summons that I served on the parties.

I'm considering replying to the DOE's Affirmative Defenses, as it seems to be a tactic to manipulate the undue hardship clause by saying I have no claim, simply because I have not "exhausted my administrative remedies" through them. I need a robust response for this, as it may lead a Judge to tilt more in their favor.

It's interesting that this appears to be a new defense by the DOE, rather than seeking Summary Judgment due to the existence of the Income Based / Income Contingency Repayment Plan ... None of the sources I've read mentioned anything about administrative remedies.

What I also find interesting is that in the case they quoted, the Debtor did exhaust all their remedies through the DOE by obtaining a "Total and Permanent Disability Discharge," however the Court still denied her adversary claim ... So basically the DOE is presenting a Catch 22 by saying that there is no chance to bankrupt a student loan outside of their administrative venue; you either have not exhausted your administrative remedies, or it is not up to the Court to intervene.

In any case, I know it's going to be an uphill battle -- perhaps I would have better luck seeking a settlement before it goes to trial.

[HHM]

That is not a new defense, that comes right of the Brunner case, "that the debtor made a good faith effort to repay the loans". What do you think that means? It means that you have exhausted your administrative remedies.

In any event, affirmative defenses do not require a reply. Please, please, please review the Federal and Bankruptcy Rules of Procedure.

FRCP 7
"(a) Pleadings.

Only these pleadings are allowed:

(1) a complaint;

(2) an answer to a complaint;

(3) an answer to a counterclaim designated as a counterclaim;

(4) an answer to a crossclaim;

(5) a third-party complaint;

(6) an answer to a third-party complaint; and

(7) if the court orders one, a reply to an answer."

Please note, none of the allowed pleadings are responses to affirmative defenses.

[TurnThePage]

Hi HHM:

Thanks for the reply. The good news is that I have evidence to support my "good faith loan repayment" by a letter & payment history log which was previously sent to me by the Department of Education. They actually "denied" this in the Answer which I intend to use as an Exhibit. This will cast doubt on their case.

In re to the DOE's "Affirmative Defenses," it appears that you're right. F.R.C.P. Rule 8(b)(6) also states that "If a responsive pleading is not required, an allegation is considered denied or avoided."

[TurnThePage]

United States Bankruptcy Judge__

[justbroke]

You are not dreaming. I guess the US Attorney was busy, or didn't want to fight it. Congratulations! I'm very happy for you!

[DebtEnder]

Holy Cr@p you won an student loan discharge AP filed Pro Se.

Even if it was just a default still, wow. Happy new year to you!

[HHM]

Get that Order to the judge ASAP.

These administrative mishaps can often be reversed depending on the circumstances.

[NoMoreCards]

I have to give you a standing ovation!!!

Thank you for keeping us updated, and CONGRATS just does not express how happy I am for you. Your effort, determination and nerve to even attempt this is inspirational to say the least.

I wish you the very best in the future.

[tigergem]

Oh WOW, this is just awesome news. Congratulations, TurnThePage! woo hoo~! WTG! I am just beside myself happy for you!