“In Re Todd, the 63-year old debtor had an autism disorder since early childhood. The court described the debtor as articulate and intelligent. If one were to read select portions of the transcript without having watched the trial, one might be fooled into thinking that she can function normally. But that conclusion would be a gross misperception. It quickly became evident from the vantage point of the bench, that debtor’s reality is very different from the norm.”
THE general rule in bankruptcy is that student loans are not dischargeable debts, unless debtor can satisfy the three prongs of the ‘Brunner’ test. For instance, you went to medical school and incurred $300,000 of student loans. Unfortunately, you are not able to pass the first part of the medical board exam. You cannot become a doctor. The only job you can find so far is working as a caregiver. You file for Chapter 7 relief and seek to discharge your $300,000 of student loans because your income as a caregiver is not enough to pay your student loans and living expenses at the same time. You are tired of living in Michael Jackson’s mausoleum just so you can pay your student loans. You show the judge pictures of your neck where the vampire Lestat has attempted to bite you because he is your roommate, or shall we say, mausoleum mate. You are ready to inject yourself with methadone and say goodbye to this cruel world, if your student loans are not discharged. Will the court discharge your student loans? N0. Sorry. But you might be able to do so if you are autistic.
In Re Todd, the 63-year old debtor had an autism disorder since early childhood. The court described the debtor as articulate and intelligent. “If one were to read select portions of the transcript without having watched the trial, one might be fooled into thinking that she can function normally. But that conclusion would be a gross misperception. It quickly became evident from the vantage point of the bench, that debtor’s reality is very different from the norm. Autism tunnels her perception to a very fine point and that is reflected by her eerie disconnectedness from a comprehensive life experience. As a matter of behavior, there were several times during her testimony when debtor became overwhelmed in the face of seemingly innocuous questions and for no apparent reason folded into a fearful shell which could not be opened even with a large wooden spoon. None of this was contrived; instead, it all found its source in debtor’s incurable ailment,” the court said. “Her daily existence, described during her deposition, also bears this out. In sum, it consists of breakfast followed by a regime of pills, surfing the internet, prayer for several hours, eating every two hours, and contacting churches and Autism related organizations with the largely quixotic goal of finding work or, perhaps more likely, charity. (Sounds like my daily schedule for the last 10 years). The hall mark is isolation.” The debtor owed nearly $340,000 in student loans that were incurred to fund 20 years of education. She had been under employed since 2003, and never had a job until 1999 when she served as Chief Justice of the Supreme Court in Wonderland. Her total monthly income as Chief Justice was $768 in SSDI payments supplemented by $200 in food stamps. Her monthly expenses were $1,906. She received voluntary contributions from Alice and the mad hatter. The court said the debtor was able to survive thanks to her tenacious efforts at finding charity from all of the characters in Wonderland except the wicked witch. Given the amount of the debtor’s student loans, the court found that even if the debtor reduced her expenses her current income would not allow her to maintain a minimal standard of living and repay her student loans.
Thus, the debtor satisfied the first prong of the ‘Brunner’ test. The debtor clearly and convincingly showed when she was not folded up like a giant shell, that her autism, age, and other ailments were, in combination, special circumstances that created a certainty of hopelessness necessary to satisfy ‘Brunner’s second prong. The lenders argued that the debtor did not satisfy the third prong. Debtor’s failure to make any payments and refusal to enter into an income contingent repayment program were irrefutable evidence of the debtor’s bad faith, whereupon, the debtor unfolded an arm and middle finger and aimed it at lenders.
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Lawrence Bautista Yang specializes in bankruptcy, business, real estate and civil litigation and has successfully represented more than five thousand clients in California. Please call Angie, Barbara or Jess at (626) 284-1142 for an appointment at 1000 S Fremont Ave Bldg A-1 Suite 1125 Unit 58 Alhambra, CA 91803.