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Civil Procedure — compulsory counterclaims

By: WISCONSIN LAW JOURNAL STAFF//October 28, 2014//

Civil Procedure — compulsory counterclaims

By: WISCONSIN LAW JOURNAL STAFF//October 28, 2014//

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U.S. Court of Appeals for the 7th Circuit

Civil

Civil Procedure — compulsory counterclaims

Although the Department of Education did not seek to recover a student loan in a bankruptcy adversary proceeding, it is not barred from filing a counterclaim to recover, when the debtor later sought to enjoin recovery.

“Had the government filed a counterclaim in the adversary proceeding, seeking repayment of the Greenes’ student loans—as it could have done—and had lost, it could not have refiled its claim as a counterclaim in the present suit. Adams v. City of Indianapolis, 742 F.3d 720, 735–36 (7th Cir.2014). That would have been harassment. But the government had sound reasons for holding off from seeking affirmative relief in the adversary proceeding. Better to block discharge of Greene’s student loan debt, and thus reserve the right to sue later to collect the money owed it, than to try to draw water from a stone. So far as appears, the Greenes had(as suggested by their being allowed to discharge most of their debts)little in the way of assets on which the government could have levied in 2005. The government could and did pursue other remedies, such as garnishment, which are simpler and cheaper than suing; freed of their other debts the Greenes might have been able to begin, at least, to repay their student debt.”

Affirmed.

13-3257 Greene v. UDEC

Appeal from the United States District Court for the Northern District of Indiana, Van Bokkelen, J., Posner, J.

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