## Facts

- Thomas Francis Barrett, Jr. filed a Chapter 7 petition and sought to discharge approximately $94,751 in student-loan debt under 11 U.S.C. § 523(a)(8).
- Barrett had significant long-term medical problems, including autoimmune and vision-related illness beginning in college.
- In 2000, Barrett was diagnosed with Stage IVB Hodgkin’s disease and underwent extensive chemotherapy, leaving him unable to work for substantial periods.
- After treatment, Barrett’s health limits persisted, he worked only part-time, and his income was insufficient to cover basic monthly expenses.
- Barrett obtained economic hardship deferments rather than making payments, asserting inability to pay.
- The creditor, Educational Credit Management Corporation (ECMC), argued Barrett failed to prove long-term inability to repay without expert medical testimony.
- ECMC also argued Barrett lacked good faith because he declined to enroll in the Income Contingent Repayment Plan (ICRP), which would adjust payments based on income and forgive remaining balances after 25 years (with potential tax consequences on forgiven amounts).

## Issues

1. Whether a debtor must present expert medical testimony to establish that medical circumstances will persist for a significant portion of the repayment period under the undue-hardship standard.
2. Whether refusal to enroll in the ICRP conclusively shows lack of good faith under the third prong of the undue-hardship test.

## Decision

- The Sixth Circuit affirmed the Bankruptcy Appellate Panel, which had affirmed the bankruptcy court’s order discharging Barrett’s student loans for undue hardship.
- The court held there is no categorical requirement that a debtor present expert medical evidence to satisfy § 523(a)(8).
- The court held that declining to enroll in the ICRP does not, by itself, defeat the good-faith element of undue hardship.

## Legal Principles

- Under 11 U.S.C. § 523(a)(8), student loans may be discharged only upon proof of “undue hardship.”
- The undue-hardship inquiry applies the Brunner test: (1) inability to maintain a minimal standard of living if forced to repay; (2) additional circumstances showing the inability is likely to persist for a significant portion of the repayment period (often framed as a “certainty of hopelessness”); and (3) good-faith efforts to repay.
- The second prong sets a demanding substantive standard, but it does not impose a procedural rule requiring expert medical testimony; bankruptcy courts may rely on debtor testimony and other non-expert evidence if credible and sufficiently supported.
- Participation in income-driven repayment options is relevant to good faith but is not legally mandatory; good faith is assessed from the debtor’s overall conduct and realistic long-term consequences, including potential tax liability from loan forgiveness.

## Conclusion

The Sixth Circuit upheld discharge of Barrett’s student loans, rejecting a per se expert-testimony requirement for medically based undue hardship and holding that refusal to enter the ICRP did not automatically negate good faith where long-term financial distress and potential tax consequences made the program an unrealistic solution.


In re Barrett, 487 F.3d 353 (6th Cir. 2007)