By Diane Davis
A Chapter 7 debtor can’t get student debt wiped out because she failed to litigate the issue in a state court proceeding, the U.S. Bankruptcy Court for the Eastern District of Michigan held.
The default judgment Maria Romo’s former in-laws obtained in state court “closes the door” to the debtor and her argument that the debt wasn’t enforceable, Judge Daniel S. Opperman said May 14. Collateral estoppel prevents an issue to be relitigated when the action is the same between parties, the earlier proceeding led to a valid final judgment, and the parties had a fair opportunity to litigate it, the court said. Romo had a “full and fair opportunity” to litigate the issue in state court but “chose not to do so,” the court said.
She incurred significant student loan debt to obtain two degrees. The U.S. Department of Education offered loan forgiveness if she paid $105,000.Romo’s former in-laws paid the debt and a cryptic receipt of the transaction required her to pay them $400 every two weeks.
After Romo divorced and defaulted on the loan, the former in-laws sued her in state court for the $83,450 still due, and obtained a default judgment.
Romo filed Chapter 7. The former in-laws said the debt can’t be discharged under Bankruptcy Code Section 523(a)(8). The court wasn’t able to decide whether the debt was enforceable because of the state court judgment.
Michael J. Shovan, Saginaw, Mich., represented Romo in her Chapter 7 case.
Ramani v. Romo (In re Romo) , 2018 BL 172974, Bankr. E.D. Mich., 17-21440-DOB, 5/14/18 .
To contact the reporter on this story: Diane Davis in Washington at email@example.com
To contact the editor responsible for this story: Jay Horowitz at firstname.lastname@example.org
Copyright © 2018 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)