Weekend Economists: See the Kittehs! May24-27, 2013

[DemReadingDU]

45. Court Is Not Allowed To Come Into Your House and Repurpose Your Wife

5/24/13
In Showing Undue Hardship, Court Is Not Allowed To Come Into Your House and Repurpose Your Wife By Elie Mystal
9th Circuit, Bankruptcy, Morrison & Foerster, Student Loans

Regular readers of this blog know that you cannot discharge student loan obligations through bankruptcy absent a showing of undue hardship. If you go broke borrowing money for expensive cars, houses, and monkeys/butlers, no problem, file for bankruptcy and start over. But if you go broke trying to better yourself through education, the government will make you beg and prove that you are sad and hopeless. Wonderful system we’ve got here.
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The court can’t look at your household and suggest that you pimp out your wife. So at least that’s something…

The case arises out of the sad story of Michael Hedlund. Hedlund graduated from the University of Oregon and then Willamette Law School in 1997. He then failed the bar twice, missed a third opportunity to sit for the bar when he locked his keys in his car, and ended up as a juvenile counselor. He owed $85,000 in 1999 (can you imagine what that would be for a 2013 grad?), and defaulted on his loans. Bad things continued to happen, and eventually he filed for bankruptcy.
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But to me, the most “vexatious” finding from the district court is this one:

Finally, the court observed that Hedlund and his wife had chosen to live as a single-income family, “a life-style that few today can afford.”

Who in the f**k does this court think it is? The Hedlunds have kids. The court has no right to dictate how they are cared for. For all we know, the wife’s earning potential wouldn’t cover child care costs. And even if it would, a court cannot essentially order a man to pimp out his wife to pay his debts. It’s one thing for a court to look at finances, but this crosses a line into judging the Hedlunds’ marital relationship. It’s disgusting. What’s the next step? “While Mrs. Hedlund doesn’t have a lot of skills, she is pretty and athletic enough to at least be a stripper, a fact that seems to not have occurred to Mr. Hedlund before filing for bankruptcy.”

In reversing the district court, the Ninth Circuit addressed this directly:

There was considerable evidence showing that Hedlund had maximized his income, and the [bankruptcy] court properly declined to attribute Mrs. Hedlund’s underemployment to Hedlund’s bad faith.

Thank God. It’s hard enough to show undue hardship without that court judging what your wife does for a living.

http://abovethelaw.com/2013/05/in-showing-undue-hardship-court-is-not-allowed-to-come-into-your-house-and-repurpose-your-wife/