01-3074 Goulet v. Educational Credit Management Corp.

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“We do not believe that the bankruptcy court clearly erred in its factual findings, but rather conclude that it erred, as a matter of law, in holding that Goulet’s circumstances rise to the level of those ‘additional, exceptional circumstances’ necessary to satisfy the second prong of the Brunner ‘undue hardship’ test. Goulet’s contention that his alcoholism and felony conviction make it impossible for him to find work is unpersuasive. By his own admission, these circumstances predated his attendance at UW-Stout and his acceptance of the responsibility of these student loans. By returning to graduate school at the age of 45 and voluntarily assuming the debt, Goulet must have believed that he had future earnings potential. See Roberson, 999 F.2d at 1137 (noting that ‘government is not twisting the arms of potential students. The decision of whether or not to borrow for a college education lies with the individual . . . .’). He has serious problems, but we are reluctant to label these pre-loan problems ‘additional, exceptional circumstances’ so as to constitute ‘undue hardship’ for purposes of Section 523(a)(8). Additionally, while Goulet’s testimony demonstrates that he has substance abuse issues, we note that the record is devoid of any evidence demonstrating that his problems are insurmountable, or that they impair his ability to work. See Brightful, 267 F.3d at 330 (no record basis for conclusion that debtor’s emotional problems, including two suicide attempts, constitute ‘additional circumstances’ under second prong of test). Presumably he has some source of revenue to maintain his claimed drug dependency. As the bankruptcy court noted, Goulet is an intelligent man. The record does not reveal that he lacks usable job skills or that he is hindered by a limited education. In fact, because of the loans, he received an excellent education. The natural conclusion, when considering his exemplary educational record and nearly-completed graduate work, is that Goulet can apply himself when he desires to do so. The record does not demonstrate that he lacks the capacity to work, only that he does not seem anxious to do so.

Moreover, even if Goulet’s prospects in the mental health field or the insurance industry are foreclosed, there is no evidence that Goulet is unemployable in other areas. Rather, the record indicates that Goulet has simply failed to diligently pursue employment such that he would be able to alleviate his financial burdens. See Brightful, 267 F.3d at 329 n.4 (record indicates that debtor had not diligently pursued employment). Under these circumstances, we conclude that Goulet’s condition has not reached the ‘certainty of hopelessness’ that would lead us to find that his condition is likely to persist for a significant portion of the repayment period.”

Affirmed.

Appeal from the United States District Court for the Western District of Wisconsin, Shabaz, J., Manion, J.