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

[TurnThePage]

Hi All:

To make a long story short, I mailed in my "Complaint to Determine Dischargeability of Student Loan" to the Court.

I am the Debtor attempting to discharge my Direct Loan via an Adversary Proceeding.

I just received the Summons a week later, and I have limited time (10 days) to serve the Defendant ("US Department of Education").

Does anyone know how to serve the Defendant in an Adversary Proceeding? Can the Plaintiff serve these documents through the mail, or must a third party sign "under penalty of perjury" a Certificate of Service?

My understanding is that "Certified Mail / Return Receipt" by the Plaintiff is sufficient in Adversary Proceedings, to serve the defendant(s) himself, IF I read the rules correctly ....

The Federal Rules of Bankruptcy Procedure say: "Rule 7004. Process; Service of Summons, Complaint
(a) Summons; service; proof of service.
(1) Except as provided in Rule 7004(a)(2), Rule 4(a), (b), (c)(1), (d)(1), (e)-(j), (l), and (m) F.R.Civ.P. applies in adversary proceedings. Personal service under Rule 4(e)-(j) F.R.Civ.P. may be made by any person at least 18 years of age who is not a party, and the summons may be delivered by the clerk to any such person.

(2) The clerk may sign, seal, and issue a summons electronically by putting an "s/" before the clerk's name and including the court's seal on the summons.

(b) Service by first class mail.
Except as provided in subdivision (h), in addition to the methods of service authorized by Rule 4(e) -(j) F.R.Civ.P., service may be made within the United States by first class mail postage prepaid as follows:

(4) Upon the United States, by mailing a copy of the summons and complaint addressed to the civil process clerk at the office of the United States attorney for the district in which the action is brought and by mailing a copy of the summons and complaint to the Attorney General of the United States at Washington .."

I need to serve the U.S. Department of Education by tomorrow ... Anyone know if I can mail these documents myself -- or do I need to have a friend do it & sign the Certificate of Service? Spoke to several Attorneys today, even called the Court & asked -- no one knows .... I'm soooo confused.

[UpsideDownMI]

I served mine by certified mail. I also had to file a notarized proof of service with a copy of the receipt for the certified mailing. Call the court clerk and see what is required in your district.

[MSbklawyer]

I just received the Summons a week later, and I have limited time (10 days) to serve the Defendant ("US Department of Education").

Why do you think you only have 10 days to serve the summons and complaint?

[UpsideDownMI]

Per AP rules, a summons must be served within 10 days of issuance or a new summons must be issued.

[MSbklawyer]

Per AP rules, a summons must be served within 10 days of issuance or a new summons must be issued.

Wow, you're right. I did not know that. It's 120 days in other federal court actions.

[justbroke]

So, what happened with this?

[TurnThePage]

Served it via Certified Mail -- I figured the postal carrier classifies as a "non-party," as they won't deliver without a signature. I reread the Federal Rules for Bankruptcy Procedure & it says "service may be made within the United States by first class mail postage prepaid .." So I think I did it correctly LOL

[HHM]

Wow, trying to do a student loan discharge pro se. I applaud the effort.

Do you have 2 expert witnesses ready to testify. One as to the nature of your hardship and another that will testify that for the foreseeable future, you cannot earn sufficient income to pay the students loans and meet your basic expenses. Also, have you exhausted your options for repayment. Just this year, (July, 2009), they activated the Income Based Repayment option (which is different than the previous income sensitive). If you haven't at least applied for IBR, your case may be dead in the water.

Anyway, some things to think about. These cases are not like court TV, you don't simply show up and tell the judge in 15 minutes or less why the student loans should be discharged. But in any event, good luck.

[TurnThePage]

Hi there HHM:

You are correct -- I've done many hours of research, & most Attorneys as well as the Department of Education will say it's impossible to bankrupt the loans.

But I'm actually considering filing a "Motion for Summary Judgement," too, against the Department of Education. Technically all I need to prove is "undue hardship" before the Judge -- but do I even need witnesses? Maybe Exhibits are enough? "Exhibit A," for instance, my Proof of Income Statement from the Social Security Administration, says "Individual -- Disabled." How can the Department of Education possibly win against someone struggling on SSI: $674.00 a month, well below the Federal Poverty Level. Most Courts use the Brunner Test, and I believe I've satisfied the three prongs: poverty, persistence, & good faith loan repayment ... Both the Income Contingent & Income Based Repayment Plans will continue to accrue interest on the loan, and although technically it would not be in default, it will only delay the inevitable fact of undue hardship.

[AngelinaCatHub]

Hi there HHM:

You are correct -- I've done many hours of research, & most Attorneys as well as the Department of Education will say it's impossible to bankrupt the loans.

But I'm actually considering filing a "Motion for Summary Judgement," too, against the Department of Education. Technically all I need to prove is "undue hardship" before the Judge -- but do I even need witnesses? Maybe Exhibits are enough? "Exhibit A," for instance, my Proof of Income Statement from the Social Security Administration, says "Individual -- Disabled." How can the Department of Education possibly win against someone struggling on SSI: $674.00 a month, well below the Federal Poverty Level. Most Courts use the Brunner Test, and I believe I've satisfied the three prongs: poverty, persistence, & good faith loan repayment ... Both the Income Contingent & Income Based Repayment Plans will continue to accrue interest on the loan, and although technically it would not be in default, it will only delay the inevitable fact of undue hardship.

I must say, you have enormous testosterone. I have to give you credit, it just may fly. Worth a try. Remember though, if you lose, you could be liable for the Defendants legal fees and they too are not discharged. However, you sound like you are collection proof anyway. I sure wish you good fortune and please keep us posted. I'm not asking but I sure would spend pacer pennies on your progress. 'Hub

[HHM]

Hi there HHM:

You are correct -- I've done many hours of research, & most Attorneys as well as the Department of Education will say it's impossible to bankrupt the loans.

But I'm actually considering filing a "Motion for Summary Judgement," too, against the Department of Education. Technically all I need to prove is "undue hardship" before the Judge -- but do I even need witnesses? Maybe Exhibits are enough? "Exhibit A," for instance, my Proof of Income Statement from the Social Security Administration, says "Individual -- Disabled." How can the Department of Education possibly win against someone struggling on SSI: $674.00 a month, well below the Federal Poverty Level. Most Courts use the Brunner Test, and I believe I've satisfied the three prongs: poverty, persistence, & good faith loan repayment ... Both the Income Contingent & Income Based Repayment Plans will continue to accrue interest on the loan, and although technically it would not be in default, it will only delay the inevitable fact of undue hardship.

I hope it works. But you have to realize, you are oversimplifying. The thing is, "undue hardship" has several factors. Sounds like you have a strong case. But these cases are almost always fought and summary judgment motions are very easy for the defense to overcome. So, I wouldn't be hinging your case on the ability to get a summary judgment motion granted. Where these cases are typically lost is on the "persistence" prong. You haven't really shared any details of your circumstances, so I cannot say one way or the other, but, unless you are in your 60's or older, you will need someone to testify that in your current condition, there is no possible way for foreseeable future to earn more money than your SSI disability.

Courts don't "assume" facts. Every piece of the test needs to be supported by admissible evidence. The fact that you are on SSI "now", does not mean you have no ability to pay back in the future, you need someone to "tell" the court that you cannot pay back.

[TurnThePage]

"Persistence" is probably one of the most difficult prongs -- but then I wonder if additional "exhibits" could be used, such as a doctor's notes or other prescriptions, i.e. most medications will state an explanation, "for depression," etc. With written proof, is expert testimony necessary to prove facts to the Court?

I think I have a strong case, I just need to be aware of the Department of Education trying to win on a technicality, since the "burden of proof" is my own.

[justbroke]

"Persistence" is probably one of the most difficult prongs -- but then I wonder if additional "exhibits" could be used, such as a doctor's notes or other prescriptions, i.e. most medications will state an explanation, "for depression," etc. With written proof, is expert testimony necessary to prove facts to the Court?

Well, what do you do when the United States DOE brings in their expert witness?

[TurnThePage]

Hi Just Broke:

I would deny their "facts" or theories ... The Department of Education believes that the Income Contingent or Income Based Repayment Plans negate the "undue hardship" clause, and thus contend that anyone can make $0 payments if their income drops below a certain level. However, with interest tacked onto the loan, much like Forbearance -- and since I used up all my allowed "Economic Hardship" Deferments, the fact remains that I've not only made a good faith repayment over several years, but a preponderance of the evidence may suggest to the Judge that it would be nearly impossible for me to pay it back on SSI, since the principal now is larger than the original loan.

If the Judge thinks I'm 51% right, I should win. I just can't see the Judge ruling against me on this one -- it seems my case is a no brainer ... I've exhausted all my remedies; I've obtained Forbearances & Deferments to keep my account in good standing. I've requested & looked @ the Department of Education's Income Contingent / Income Based Plans, and their hardship discharge, which ironically enough (according to them), I don't qualify. But the Department of Education is biased and has aggressively attacked and manipulated the undue hardship clause, attempting (or trying) to make it impossible for people to bankrupt the loans. But I'm willing to fight against them anyway LOL

Thank you all for the comments and support -- I'll keep you posted.

[jadams]

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).

So yes with a $0 IBR payment interest will be adding to the loan each month, but at least in theory if you income never changed you would end up with the balance of the loan being forgiven at 25 years.

If your only income is $674 in SSDI, that should give you $0 discretionary above poverty level, and thus a $0 ICR payment.

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

This way if, in the future, you income changed you would need to provide roughly 10% of your discretionary income towards the payments for the remainder of the 25 year period. If not, it would all just discharge at 25 years.

Judges tend to like easy decisions that don't rock the boat and provide room for a future change in circumstances. It's going to be hard to argue against ICR as a valid option.