Cheryl Craig v. Educational Credit Management

This case requires us to address the dischargeability of a student loan in bankruptcy under 11 U.S.C. § 523 (a)(8) based on “undue hardship.”

FACTS AND PROCEDURAL HISTORY

Cheryl Lee Craig took out student loans beginning in 1990 to attend Pima Community College and the University of Arizona. She obtained an AA in paralegal studies in 1992, and a BA in sociology in 1996. In 2003, she consolidated her student loans through a consolidation loan with Educational Credit Management Corporation (“ECMC”). It is this consolidated loan that is at issue in these proceedings.

Craig obtained various deferments and forebearances on her student loans, both before and after consolidation. As a result, she has never made a payment on the loans. In October 2004, she petitioned for Chapter 7 bankruptcy relief and initiated this adversary proceeding against ECMC, seeking to have her student loan debt discharged under 11 U.S.C. § 523 (a)(8) based on undue hardship. As of April 10, 2005, she owed $81,575 on the consolidated student loan.

A one day trial was held on April 25, 2005. At the time of trial, Craig was forty-seven years old. She worked full-time as a customer service representative for…