Posted on 07/10/2009 5:58:17 AM PDT by stan_sipple
He garnered some sympathy from two lower courts, but a three-judge appeals panel isn't letting a Minnesota lawyer off the hook from repaying his massive student loan debt.
The 8th U.S. Circuit Court of Appeals reversed a bankruptcy court and a district court and found that attorney Mark Allen Jesperson could not discharge more than $360,000 in student loan debt in a Chapter 7 proceeding.
The two lower courts had found that repaying the "shockingly immense" debt would create an undue hardship for Jesperson. But the appeals court on Wednesday determined that his "self-imposed limitations," which resulted in a gross income of $48,000, were no excuse for nonpayment.
The appeals court found that the lower courts should have considered in their undue hardship analysis Jesperson's eligibility for federal loan repayment assistance under the Income Contingent Repayment Plan (ICRP).
Jesperson, a 2000 graduate of Lewis & Clark Law School in Portland, Ore., had amassed $363,218 in student loan principal, interest and collection costs when he filed for bankruptcy in 2005. According to the ruling, he worked as a judicial clerk on the island of Saipan after graduation, then as an attorney with Alaska Legal Services and later as a legal temporary worker with Kelly Services.
"He quit each job for a variety of personal reasons," the decision said. ECMC v. Jesperson, No. 07-3888.
Jesperson could not be reached for comment about the decision. His attorney, Monica Lynn Clark, of counsel with Dorsey & Whitney in Minneapolis, declined to comment.
As part of Jesperson's bankruptcy filing, he sought debt relief from his student loans, claiming undue hardship as an exception to the general rule that student loans are not dischargeable. According to the decision, he had not repaid any of his student loans.
The U.S. Bankruptcy Court for the District of Minnesota in 2007 found that Jesperson's employment track record was "besmirched by a patent lack of ambition, cooperation and commitment." However, that court also determined that, based on a 33 percent tax bracket and Jesperson's monthly expenses, which included child support, the surplus left to pay his student loans was "at best a trifle" and was "more likely a fiction."
The student loan lenders argued in bankruptcy court and in federal district court that if Jesperson had used the federal repayment program, his loan payments would have equaled no more than $629 per month and would have contributed to a surplus for him of $900 per month.
But both courts declined to consider that calculation, finding that they could not factor the federal loan repayment program into a hardship analysis because the program did not permit a "fresh start" for Jesperson, as permitted under bankruptcy law.
The appeals panel disagreed.
"If the debtor with the help of an ICRP program can make student loan repayments while still maintaining a minimal standard of living, the absence of a fresh start is not undue hardship," it said.
The panel also found that the lower courts' calculations of Jesperson's monthly income and expenses based on 33 percent tax bracket was incorrect. Instead, it said that the correct tax bracket was 17.5 percent.
Gee, isn't Monica Lewinsky an alumna of Lewis and Clark?
... had amassed $363,218 in student loan principal, interest and collection costs when he filed for bankruptcy in 2005.
It sounds to me as if Jesperson took out loans with no intention of repaying them four all four years of college and both years of law school. We need to put an end to people running up huge debts with the intention of filing bankruptcy.
Have you seen those commercials advertised on MTV during the day showing college students with fistfuls of cash? That's how.
I don't want to diminish personal responsibility but there are many student loan agencies that make it real easy for students to get money. A lot of money. Not only for class but to live quite comfortably while attending school. They take advantage of the students' financial naivety. Of course, these formerly naive students get a real quick lesson in compounding interest when the bill comes due. There's a whole lot of young people out there in the same dire straits as this lawyer. Congress is starting to take notice.
And to be fair, a big chunk of that $360k is in interest and penalties, which add up quick when one hasn't made a single payment towards his student loans in the last four years.
The credit rating companies should really start including info on lawsuits and disputes someone has been involved in. You don't really want to deal with someone with a history of conflict if you can avoid it.
Our founding fathers put bankruptcy protections in place to prevent economic slavery from creditors. The fact that it was our government lent this idiot $360,000 (It's not clear how much the original loan principal was) is a fault of the government's lending practices as much as this idiot.
$48,000 is not an unreasonable salary for most people. It may be low for an attorney, but it seems to me there is a glut of attorneys or maybe just a glut of legal processes.
It's made worse by the fact that he probably has a ridiculous child support obligation. And that child support obligation is made worse by the court's refusals to give Dad's equal time with their kids, simultaneously taking away their kids while increasing the amount of Child Support since they have less time.
If you think income tax is a demotivator, imagine that both the taxman and your ex are going to take their shares of any increases you make, and any increases you make are likely to lock in your payment to your ex at a higher level, because the divorce courts are less understanding than the IRS when your income goes down.
I think
His $360,000 in debt had to have included undergrad costs as well as law school, plus a lot of penalties and interest. He has probably never paid dime one on any of his loans.
The whining little POS obviously believes he is entitled to a free ride. Fortunately, the Eighth Circuit had the guts to slap him in the face and, maybe, just maybe, make a man out him.
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