Tetzlaff v. Educational Credit Management Corp.

Mark Tetzlaff (debtor) was 56 years old and unemployed. Between the 1990s and 2005, Tetzlaff had attended and graduated from business school and law school. Tetzlaff had failed the bar exam twice and had a personal history that he claimed made it difficult for him to find employment—he struggled with anxiety and depression, he had been involved in domestic disputes, and he had various misdemeanor convictions. In 2012, Tetzlaff filed for Chapter 7 bankruptcy and sought to discharge roughly $260,000 in student-loan debt guaranteed by Educational Credit Management Corporation (Educational Credit) (creditor). Tetzlaff claimed that discharge was appropriate under 11 U.S.C. § 523(a)(8) because repaying his loans would impose an undue hardship. At trial on Tetzlaff’s discharge request, Educational Credit presented expert testimony that Tetzlaff’s anxiety and depression were not clinical and that Tetzlaff might be exaggerating his symptoms. The bankruptcy court also received evidence that Tetzlaff had advanced degrees, was a good writer, was intelligent, and was past most of his domestic issues. Tetzlaff presented evidence that he had already repaid most of his law-school loans but presented no evidence that he had repaid any of the loans for which he was seeking discharge. The bankruptcy court found that Tetzlaff had not shown undue hardship and thus that the loans could not be discharged. The district court affirmed, and Tetzlaff appealed.