{"id":65108,"date":"2020-01-24T15:14:23","date_gmt":"2020-01-24T20:14:23","guid":{"rendered":"http:\/\/www.bu.edu\/law\/?p=65108"},"modified":"2021-03-03T10:52:16","modified_gmt":"2021-03-03T15:52:16","slug":"lecturer-helps-client-discharge-student-loan-debt-sets-precedent-in-mass-bankruptcy-law","status":"publish","type":"bu-article","link":"https:\/\/www.bu.edu\/law\/record\/articles\/2020\/lecturer-helps-client-discharge-student-loan-debt-sets-precedent-in-mass-bankruptcy-law\/","title":{"rendered":"Lecturer Helps Client Discharge Student Loan Debt, Sets Precedent in Mass. Bankruptcy Law"},"content":{"rendered":"\t<div class=\"wp-block-editorial-leadin record-block-editorial-leadin is-style-default-alt has-media has-media-focus-center-middle has-secondary-theme\">\n\t\t<div class=\"container-lockup\">\n\n\t\t\t<div class=\"wp-block-leadin-media\">\n\t\t\t\t\n\t\t\t\t<img width=\"700\" height=\"500\" src=\"\/law\/files\/2020\/01\/Frank-Morrissey.jpg\" class=\"\" alt=\"Lecturer Francis C. Morrissey (\u201994)\" loading=\"lazy\" srcset=\"https:\/\/www.bu.edu\/law\/files\/2020\/01\/Frank-Morrissey.jpg 700w, https:\/\/www.bu.edu\/law\/files\/2020\/01\/Frank-Morrissey-636x454.jpg 636w, https:\/\/www.bu.edu\/law\/files\/2020\/01\/Frank-Morrissey-482x344.jpg 482w\" sizes=\"(max-width: 700px) 100vw, 700px\" \/>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t<p class=\"wp-block-editorial-leadin-caption wp-prepress-component-caption\">Lecturer Francis C. Morrissey (\u201994), an experienced bankruptcy litigator, teaches in BU Law\u2019s LLM in Banking &amp; Financial Law Program. | Photo by Mike Spencer<\/p>\n\t\t\t\n\n\t\t\t\n\t\t\t\t<div class=\"container-words-outer\">\n\n\t\t\t\t\t\n\t\t\t\t\t<div class=\"container-words-inner\">\n\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"wp-prepress-tag\">Financial Law<\/span>\n\t\t\t\t\t\t\t\t<h1 class=\"head\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tLecturer Helps Client Discharge Student Loan Debt, Sets Precedent in Mass. Bankruptcy Law\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/h1>\n\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t<h4 class=\"deck\">Bankruptcy litigator Francis Morrissey (&#8217;94) helped a single mother keep her home and find relief from overwhelming student loan debt.<\/h4>\n\t\t\t\t\t\t\n\t\t\t\t\t<\/div>\n\n\t\t\t\t<\/div>\n\n\t\t\t\n\t\t<\/div>\n\n\t\t\n\t<\/div>\n\n\t\n<div class=\"wp-prepress-component-metabar record-prepress-layout-metabar\">\n\t<div class=\"wp-prepress-component-metabar-wrapper\">\n\t\t\t\t\t<div class=\"wp-prepress-component-metabar-date\">January 24, 2020<\/div>\n\t\t\n\t\t\t\t<div class=\"wp-prepress-component-metabar-credits\">\n\t\t\t\t\t\t\t\t<ul data-credit-type=\"By\">\n\t\t\t\t\t\t<li><a href=\"https:\/\/www.bu.edu\/law\/record\/authors\/corinne-steinbrenner\/\">Corinne Steinbrenner<\/a><\/li>\n\t\t\t\t\t<\/ul>\n\t\t\t\t\t\t\t<\/div>\n\t\t<div class=\"wp-prepress-component-metabar-share js-bu-prepress-share-tools\">\n\t\t\t<span class=\"icon-twitter\"><span>Twitter<\/span><\/span>\n\t\t\t<span class=\"icon-facebook\"><span>Facebook<\/span><\/span>\n\t\t\t<span class=\"icon-action\"><\/span>\n\t\t<\/div>\n\t<\/div>\n<\/div>\n\n\t\n\n\n<p>In 2005, when Audrey Schatz applied for student loans and enrolled in Western New England College School of Law, the single mother in her early fifties hoped she was preparing for a more lucrative second career. A decade later, however, she found herself underemployed, ill, and scrambling to make the $1,000-a-month payments on her student loans. Out of options, <a href=\"https:\/\/casetext.com\/case\/schatz-v-access-grp-inc\" target=\"_blank\" rel=\"noopener noreferrer\">Schatz filed for bankruptcy relief<\/a>, but her request to discharge her student loans was denied.<\/p>\n\n\n\n<p>Today, Schatz is free of her crushing student loans\u2014and her case has set new precedent in bankruptcy law\u2014thanks to <em>pro bono<\/em> representation by BU Law Lecturer <a href=\"https:\/\/www.bu.edu\/law\/profile\/francis-c-morrissey\/\">Francis C. Morrissey<\/a> (\u201994), who took up her case on appeal.<\/p>\n\n\n\n<p>Student-loan debt is notoriously difficult to erase. According to the US Bankruptcy Code, borrowers may be forgiven their debts only if repayment would impose \u201cundue hardship\u201d on themselves and their dependents\u2014an extremely high standard to meet. Meanwhile, US student <a href=\"https:\/\/www.newyorkfed.org\/newsevents\/news\/research\/2019\/20191113\" target=\"_blank\" rel=\"noopener noreferrer\">debt has reached $1.5 trillion<\/a>\u2014more than automobile and credit-card debt combined\u2014and nearly 11 percent of student borrowers are in default.<\/p>\n\n\n\n<p>The bankruptcy court denied Schatz\u2019s request for an undue hardship discharge because the court found that she had enough equity in her modest Western Massachusetts home to pay her loans and ruled that this disqualified her from this type of relief. Had this decision stood, Schatz would have been forced to sell her home\u2014the one asset she had to support herself when, because of age or poor health, she was no longer able to work\u2014or attempt to take out a home-equity loan and be faced with yet another unaffordable monthly payment. In Schatz\u2019s appeal, Morrissey argued that the equity in Schatz\u2019s home was exempt property, protected from the claims of Schatz\u2019s student loan creditors by the <a href=\"https:\/\/www.masslegalservices.org\/content\/massachusetts-homestead-protection-law-effective-march-16-2011\" target=\"_blank\" rel=\"noopener noreferrer\">Massachusetts homestead statute<\/a> and, as a result, Schatz\u2019s ownership of this exempt property should not disqualify her from discharging her student loans. The Bankruptcy Appellate Panel agreed with Morrissey\u2019s argument and sent the case back to the Bankruptcy Court, which discharged Schatz\u2019s student loans.<\/p>\n\n\n\n<p>This was an issue of first impression, and Schatz\u2019s appeal establishes new precedent for future decisions. \u201cThe case holds that the ownership of exempt assets, by itself, does not preclude someone from getting an undue-hardship discharge,\u201d says Morrissey, an experienced bankruptcy litigator who teaches in BU Law\u2019s <a href=\"https:\/\/www.bu.edu\/law\/academics\/llm-masters-degrees\/banking-financial-law\/\">LLM in Banking &amp; Financial Law Program<\/a>. It\u2019s an important development in the law, he says, because it clarifies that student borrowers don\u2019t have to strip themselves of virtually all their assets to qualify for debt relief.<\/p>\n\n\n\n<p>John Rao, an attorney with the National Consumer Law Center, <a rel=\"noreferrer noopener\" href=\"https:\/\/masslawyersweekly.com\/2019\/08\/08\/home-equity-alone-cannot-stop-student-loan-discharge\/\" target=\"_blank\">told <em>Massachusetts Lawyer\u2019s Weekly<\/em><\/a> that the bankruptcy court\u2019s original decision would have presented huge problems to anyone hoping to obtain an undue-hardship discharge had it been allowed to stand.<\/p>\n\n\n\n<div class=\"wp-block-bu-pullquote record-block-bu-pullquote alignwide is-style- has-image-focus-center-middle has-secondary-theme\"><div class=\"wp-block-bu-pullquote-inner\"><figure><\/figure><blockquote><div class=\"container-lockup\"><div class=\"container-icon-outer\"><div class=\"container-icon-inner\"><\/div><\/div><div class=\"container-text\"><hr\/><div class=\"quote-sizing\">Both Congress and the courts recognize that certain assets are necessary to maintain a minimal standard of living and to maintain your dignity as a citizen\u2014and one important asset the law allows debtors to retain is a certain amount of equity in their homes.<\/div><footer class=\"caption\">Frank Morrissey (&#8217;94)<\/footer><hr\/><\/div><\/div><\/blockquote><\/div><\/div>\n\n\n\n<p>Morrissey adds that the appellate panel\u2019s decision reaffirms the importance of exempt property in debtor\/creditor law in general. \u201cThe law does not take every asset from you, even if you owe money to creditors,\u201d he says. \u201cBoth Congress and the courts recognize that certain assets are necessary to maintain a minimal standard of living and to maintain your dignity as a citizen\u2014and one important asset the law allows debtors to retain is a certain amount of equity in their homes.<\/p>\n\n\n\n<p>The <em>Schatz<\/em> case came to Morrissey through the Massachusetts Bar Association\u2019s <a href=\"https:\/\/www.massbar.org\/public\/student-loan-bankruptcy-assistance-project\" target=\"_blank\" rel=\"noopener noreferrer\">Student Loan Bankruptcy Assistance Project<\/a>, which Morrissey cofounded and cochairs. \u201cUnmanageable student debt is a huge social problem in this country and in this Commonwealth,\u201d he says. The bar association recently created its assistance project, \u201crecognizing that the people who are most likely to be eligible for an undue-hardship discharge are the people least likely to have the resources to hire a lawyer.\u201d The project is training <em>pro bono<\/em> attorneys\u2014even those without a bankruptcy background\u2014to represent student borrowers in adversary proceedings.<\/p>\n\n\n\n<p class=\"is-style-end-of-article\">Providing solid representation in student-loan cases is not only a boon for the borrowers, who often represent themselves unsuccessfully, but is also important for the development of the law. \u201cWhen the courts are only hearing one side of the story, the law will necessarily become distorted,\u201d Morrissey says. \u201cWhen only one party has representation, the right arguments are not going to be presented to the court, and the record is not going to be properly developed. The system only works when all parties have a lawyer.\u201d<\/p>\n\n\n\n<aside class=\"wp-block-editorial-aside record-block-editorial-aside has-light-background\">\n<h3 id=\"headline-0\" class=\"wp-block-editorial-headline record-block-editorial-headline\">Reach new heights with an LLM from BU Law<\/h3>\n\n\n\n<p>Intellectual rigor, real-world preparation, and professional achievement. Transform your standing in the legal profession with a graduate degree from BU Law.<\/p>\n\n\n\n<p><a class=\"wp-block-button wp-block-bu-button record-block-button has-secondary-theme icon-navigateright align-icon-left is-style-outline\" href=\"https:\/\/www.bu.edu\/law\/academics\/llm-masters-degrees\/\">Start your application today<\/a><\/p>\n<\/aside>\n\n\n\t<aside class=\"wp-block-editorial-relatedstories is-style-card has-three record-block-editorial-relatedstories\">\n\t\t<h3 class=\"wp-block-editorial-relatedstories-title\">Related<\/h3>\n\t\t<ul class=\"wp-block-editorial-relatedstories-list\">\n\t\t\t\t\t\t\t<li class=\"wp-block-editorial-relatedstories-list-item\">\n\t\t\t\t\t<article class=\"wp-block-editorial-relatedstories-article\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<figure class=\"wp-block-editorial-relatedstories-article-image\">\n\t\t\t\t\t\t\t\t\t<img width=\"700\" height=\"467\" src=\"\/law\/files\/2019\/10\/glass-building-and-sky.jpg\" class=\"attachment-post-thumbnail size-post-thumbnail wp-post-image\" alt=\"Low-angle photo of curtain glass wall building, photo by Christian Wiediger\" loading=\"lazy\" srcset=\"https:\/\/www.bu.edu\/law\/files\/2019\/10\/glass-building-and-sky.jpg 700w, https:\/\/www.bu.edu\/law\/files\/2019\/10\/glass-building-and-sky-636x424.jpg 636w, https:\/\/www.bu.edu\/law\/files\/2019\/10\/glass-building-and-sky-500x334.jpg 500w, https:\/\/www.bu.edu\/law\/files\/2019\/10\/glass-building-and-sky-450x300.jpg 450w, https:\/\/www.bu.edu\/law\/files\/2019\/10\/glass-building-and-sky-600x400.jpg 600w\" sizes=\"(max-width: 700px) 100vw, 700px\" \/>\t\t\t\t\t\t\t\t<\/figure>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"wp-block-editorial-relatedstories-article-content\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<p class=\"wp-block-editorial-relatedstories-article-category\"><span>Financial Law<\/span><\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<h4 class=\"wp-block-editorial-relatedstories-article-title\"><a href=\"https:\/\/www.bu.edu\/law\/record\/articles\/2019\/should-index-funds-step-up-their-corporate-governance-game\/\" class=\"wp-block-editorial-relatedstories-article-title-link\">Should Index Funds Step Up Their Corporate Governance Game?<\/a><\/h4>\n\t\t\t\t\t\t\t<p class=\"wp-block-editorial-relatedstories-article-date\">October 8, 2019<\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t\t\t<\/article>\n\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t<li class=\"wp-block-editorial-relatedstories-list-item\">\n\t\t\t\t\t<article class=\"wp-block-editorial-relatedstories-article\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<figure class=\"wp-block-editorial-relatedstories-article-image\">\n\t\t\t\t\t\t\t\t\t<img width=\"700\" height=\"450\" src=\"\/law\/files\/2019\/09\/bitcoin-and-graphs.jpg\" class=\"attachment-post-thumbnail size-post-thumbnail wp-post-image\" alt=\"A bitcoin in front of graphs\" loading=\"lazy\" srcset=\"https:\/\/www.bu.edu\/law\/files\/2019\/09\/bitcoin-and-graphs.jpg 700w, https:\/\/www.bu.edu\/law\/files\/2019\/09\/bitcoin-and-graphs-636x409.jpg 636w, https:\/\/www.bu.edu\/law\/files\/2019\/09\/bitcoin-and-graphs-500x321.jpg 500w\" sizes=\"(max-width: 700px) 100vw, 700px\" \/>\t\t\t\t\t\t\t\t<\/figure>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"wp-block-editorial-relatedstories-article-content\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<p class=\"wp-block-editorial-relatedstories-article-category\"><span>Technology Law<\/span><\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<h4 class=\"wp-block-editorial-relatedstories-article-title\"><a href=\"https:\/\/www.bu.edu\/law\/record\/articles\/2019\/tech-is-changing-tax-law-bu-laws-graduate-tax-program-has-you-covered\/\" class=\"wp-block-editorial-relatedstories-article-title-link\">Tech is Changing Tax Law. BU Law\u2019s GTP Has You Covered.<\/a><\/h4>\n\t\t\t\t\t\t\t<p class=\"wp-block-editorial-relatedstories-article-date\">September 12, 2019<\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t\t\t<\/article>\n\t\t\t\t<\/li>\n\t\t\t\t\t\t\t\t<li class=\"wp-block-editorial-relatedstories-list-item\">\n\t\t\t\t\t<article class=\"wp-block-editorial-relatedstories-article\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<figure class=\"wp-block-editorial-relatedstories-article-image\">\n\t\t\t\t\t\t\t\t\t<img width=\"700\" height=\"350\" src=\"\/law\/files\/2019\/01\/student-loan.jpg\" class=\"attachment-post-thumbnail size-post-thumbnail wp-post-image\" alt=\"student loan illustration\" loading=\"lazy\" srcset=\"https:\/\/www.bu.edu\/law\/files\/2019\/01\/student-loan.jpg 700w, https:\/\/www.bu.edu\/law\/files\/2019\/01\/student-loan-636x318.jpg 636w, https:\/\/www.bu.edu\/law\/files\/2019\/01\/student-loan-500x250.jpg 500w\" sizes=\"(max-width: 700px) 100vw, 700px\" \/>\t\t\t\t\t\t\t\t<\/figure>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"wp-block-editorial-relatedstories-article-content\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<p class=\"wp-block-editorial-relatedstories-article-category\"><span>BU Law News<\/span><\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<h4 class=\"wp-block-editorial-relatedstories-article-title\"><a href=\"https:\/\/www.bu.edu\/law\/record\/articles\/2019\/public-service-loan-forgiveness-a-primer-for-bu-law-students-and-alumni\/\" class=\"wp-block-editorial-relatedstories-article-title-link\">Public Service Loan Forgiveness: A Primer for BU Law Students and Alumni<\/a><\/h4>\n\t\t\t\t\t\t\t<p class=\"wp-block-editorial-relatedstories-article-date\">January 18, 2019<\/p>\n\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t\t\t<\/article>\n\t\t\t\t<\/li>\n\t\t\t\t\t\t<\/ul>\n\t<\/aside>\n\t","protected":false},"excerpt":{"rendered":"<p>Bankruptcy litigator Francis Morrissey (&#8217;94) helped a single mother keep her home and find relief from overwhelming student loan debt.<\/p>\n","protected":false},"author":11260,"featured_media":65146,"comment_status":"closed","ping_status":"open","template":"","meta":{"bu_prepress_billboard":"","_bu_prepress_primary_term":"Financial Law","_bu_prepress_primary_term_manual":""},"tags":[],"bu-publication":[3742],"record-article-category":[3746,3771],"record-topic":[],"bu_edition":[],"media_type":[],"_links":{"self":[{"href":"https:\/\/www.bu.edu\/law\/wp-json\/wp\/v2\/bu-article\/65108"}],"collection":[{"href":"https:\/\/www.bu.edu\/law\/wp-json\/wp\/v2\/bu-article"}],"about":[{"href":"https:\/\/www.bu.edu\/law\/wp-json\/wp\/v2\/types\/bu-article"}],"author":[{"embeddable":true,"href":"https:\/\/www.bu.edu\/law\/wp-json\/wp\/v2\/users\/11260"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bu.edu\/law\/wp-json\/wp\/v2\/comments?post=65108"}],"version-history":[{"count":9,"href":"https:\/\/www.bu.edu\/law\/wp-json\/wp\/v2\/bu-article\/65108\/revisions"}],"predecessor-version":[{"id":77795,"href":"https:\/\/www.bu.edu\/law\/wp-json\/wp\/v2\/bu-article\/65108\/revisions\/77795"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bu.edu\/law\/wp-json\/wp\/v2\/media\/65146"}],"wp:attachment":[{"href":"https:\/\/www.bu.edu\/law\/wp-json\/wp\/v2\/media?parent=65108"}],"wp:term":[{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bu.edu\/law\/wp-json\/wp\/v2\/tags?post=65108"},{"taxonomy":"bu-publication","embeddable":true,"href":"https:\/\/www.bu.edu\/law\/wp-json\/wp\/v2\/bu-publication?post=65108"},{"taxonomy":"record-article-category","embeddable":true,"href":"https:\/\/www.bu.edu\/law\/wp-json\/wp\/v2\/record-article-category?post=65108"},{"taxonomy":"record-topic","embeddable":true,"href":"https:\/\/www.bu.edu\/law\/wp-json\/wp\/v2\/record-topic?post=65108"},{"taxonomy":"bu_edition","embeddable":true,"href":"https:\/\/www.bu.edu\/law\/wp-json\/wp\/v2\/bu_edition?post=65108"},{"taxonomy":"media_type","embeddable":true,"href":"https:\/\/www.bu.edu\/law\/wp-json\/wp\/v2\/media_type?post=65108"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}