Tetzlaff v. Educ. Credit Mgmt. Corp., No. 14-3702 (7th Cir. 2015)Annotate this Case
Tetzlaff, age 56, lives with his mother, is unemployed, and owes approximately $260,000 in student loan debt, which is guaranteed by Educational Credit Management Corporation. When Tetzlaff filed for Chapter 7 bankruptcy in 2012, he sought to have this debt discharged, claiming that repayment constituted an “undue hardship” under 11 U.S.C. 523(a)(8). The bankruptcy court held that Tetzlaff’s student debt could not be discharged. The district court and Seventh Circuit affirmed, noting that the bankruptcy court found that Tetzlaff’s financial situation has the ability to improve given that “he has an MBA, is a good writer, is intelligent, and family issues are largely over” and that “Tetzlaff is not mentally ill and is able to earn a living.” The courts rejected an argument that the bankruptcy court erred in refusing to consider Tetzlaff’s payments to Florida Coastal Law School (which were not included in the discharge action) in concluding that he had not made a good faith effort to repay the debt held by Educational Credit.