Opinion
Case No. 15-51518
01-22-2016
In re: Anita Janice Fudge, Debtor.
Chapter 7 ORDER GRANTING THE UNITED STATES TRUSTEE'S MOTION TO DISMISS
I. INTRODUCTION
Anita Fudge is a Chapter 7 debtor whose obligations are primarily consumer debts. The United States Trustee ("the UST") has investigated Debtor's financial affairs and considers her bankruptcy filing presumptively abusive of Chapter 7, because she has the means to pay at least a portion of her outstanding debt. The UST, therefore, moves to dismiss Debtor's case under sections 707(b)(2) and 707(b)(3) of the Bankruptcy Code.
Dismissal for abuse of the provisions of Chapter 7 applies only to individuals whose debts are "primarily consumer debts." 11 U.S.C. § 707(b)(1).
The Court conducted an evidentiary hearing on January 14, 2016. During the hearing, Debtor conceded that the presumption of abuse arises under 11 U.S.C. § 707(b)(2)(A)(i). However, she argues that her nondischargeable monthly student loan obligation is a "special circumstance" sufficient to rebut the presumption. The Court disagrees and GRANTS the UST's motion to dismiss.
II. ANALYSIS
11 U.S.C. § 707(b)(2)(B)(i) provides that a debtor may rebut the presumption of abuse by demonstrating "special circumstances":
the presumption of abuse may only be rebutted by demonstrating special circumstances, such as a serious medical condition or a call or order to active duty in the Armed Forces, to the extent such special circumstances that justify additional expenses or adjustments of current monthly income for which there is no reasonable alternative.The Bankruptcy Code does not define "special circumstances," but it does provide two examples: (1) a serious medical condition; and (2) a call or order to active duty in the Armed Forces. Theses examples "show a commonality; they both constitute situations which not only put a strain on a debtor's household budget, but they arise from circumstances normally beyond the debtor's control." In re Castle, 362 B.R. 846, 851 (Bankr. N.D. Ohio 2006). Applying the statutory interpretation canon of ejusdem generis, the Court interprets legislatively provided examples of a specific nature as typical of the general category covered. United States v. Brown, 536 F.2d 117, 121 (6th Cir. 1976) ("unless a statute otherwise indicates, where a listing of particular or specific objects is followed by general words to indicate that the list is incomplete, the general words will not be construed broadly, but will be limited to include only objects of the same kind or class specifically enumerated").
"Ejusdem generis" literally means "of the same kind." In re Castle, 362 B.R. 846, 851 (Bankr. N.D. Ohio 2006).
There is no evidence that circumstances beyond Debtor's control caused her to borrow money to fund her education. To the contrary, Debtor testified that she could not obtain her current position absent a Master's degree. Her decision to obtain the loan was voluntary-far different from the involuntary circumstances illustrated in the code. Therefore, Debtor's obligation to repay her student loan debt is not a "special circumstance"; the presumption of abuse is not rebutted. See In re Maura, 491 B.R. 493, 511 (Bankr. E.D. Mich. 2013) (finding debtor's student loan debt was not a "special circumstance" because it was incurred in a "deliberate manner").
In re Bradley, No. 13-01390, 2013 WL 4663125 (S.D. Ala. Aug. 30, 2013), a case upon which Debtor relies, is not persuasive. There, the court determined that debtors' student loan debt did constitute a "special circumstance" because debtors did not live a lavish lifestyle, the student loan payment exceeded their monthly disposable income, and their financial condition would be worse if they were required to file Chapter 13. Id. at **3-4. The Court in Bradley focused on the debtors' financial circumstances after they obtained the loan. But the critical inquiry is whether an event outside of the debtor's control necessitated the decision to incur the loans in the first place. See In re Pageau, 383 B.R. 221, 228 (Bankr. D.N.H. 2008) ("Educational loans incurred in pursuit of education and training that is necessitated by permanent injury, disability or an employer closing might constitute special circumstances because such events are outside the control of a debtor as are the two examples in the statute.").
III. CONCLUSION
Because Debtor has not rebutted the presumption of abuse, the UST's motion is GRANTED; Debtor's case is DISMISSED under 11 U.S.C. § 707(b)(2).
Because the Court dismisses the case under section 707(b)(2), it need not discuss section 707(b)(3). --------
IT IS ORDERED. Signed on January 22, 2016
/s/ Mark A. Randon
Mark A. Randon
United States Bankruptcy Judge