Miraglia v. U.S. Department of Education (In re Miraglia), 559 B.R. 481

Debtor Beverly Miraglia filed Chapter 7 on Feb. 28, 2015 and sought to discharge student loans held by the U.S. Department of Education as undue hardship under 11 U.S.C. § 523(a)(8).
Department of Education holds seven Direct Stafford loans (master promissory notes dated Oct. 7, 2010 and Aug. 12, 2012); total indebtedness ~ $27,297.77 at petition date.
Miraglia alleged inability to maintain a minimal standard of living, that the condition would persist, and that she made good-faith efforts to repay; her complaint lacked detailed supporting facts.
Discovery shows Miraglia never made any loan payments, did not pursue income-driven repayment plans, and submitted an incomplete Total and Permanent Disability (TPD) discharge application that was denied for failure to provide required documentation.
The Department moved for summary judgment arguing Miraglia cannot meet the Brunner good-faith prong; Miraglia offered only a one-paragraph affidavit asserting good faith.
The court found genuine disputes on the first two Brunner prongs (current inability and persistence), but concluded no genuine dispute on the third prong (good faith), and granted summary judgment for the Department.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether student loans are dischargeable as undue hardship under 11 U.S.C. § 523(a)(8) (Brunner test applies)	Miraglia asserts she cannot maintain minimal living standard, condition will persist, and she acted in good faith to repay	Department contends Miraglia did not make good-faith efforts (no payments, no income-driven plan, incomplete TPD application)	Court applies Brunner test and requires all three prongs met; Brunner governs
Ability to maintain minimal standard of living (Brunner prong 1)	Miraglia: current income/expenses make repayment impossible	Department: income records show potential ability to maintain minimal living; disputes exist but not dispositive	Court: genuine issue of material fact remains; cannot resolve on summary judgment
Likelihood that circumstances will persist (Brunner prong 2)	Miraglia alleges health problems and limited prospects	Department: evidence is vague; no clear proof of long-term hopelessness	Court: genuine issue remains; not resolved on summary judgment
Good-faith effort to repay (Brunner prong 3)	Miraglia claims she acted in good faith (conclusory affidavit)	Department: undisputed record shows no payments, no attempt at income-driven plans, and an incomplete TPD application denied for failure to provide documents; no explanation offered	Court: no genuine dispute — Miraglia failed to show good-faith efforts; summary judgment for Department granted

Brunner v. N.Y. State Higher Educ. Servs. Corp., 831 F.2d 395 (2d Cir. 1987) (established three-part undue-hardship test for student-loan discharge)
Oyler v. Educ. Credit Mgmt. Corp., 397 F.3d 382 (6th Cir. 2005) (adopted Brunner test in Sixth Circuit)
Barrett v. Educ. Credit Mgmt. Corp., 487 F.3d 353 (6th Cir. 2007) (addressed good-faith inquiry and use of income-driven plans)
Tirch v. Pa. Higher Educ. Assistance Agency, 409 F.3d 677 (6th Cir. 2005) (declined to excuse debtors who decline income contingent plans without explanation)
Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (summary judgment standard where nonmoving party bears burden)
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (U.S. 1986) (standard for evaluating record as a whole on summary judgment)
Cheesman v. Tenn. Student Assistance Corp., 25 F.3d 356 (6th Cir. 1994) (addressed first Brunner prong with income near poverty line)
Flores v. U.S. Dep’t of Educ., 282 B.R. 847 (Bankr. N.D. Ohio 2002) (lists factors relevant to good-faith repayment analysis)
In re Miller, 377 F.3d 616 (6th Cir. 2004) (abrogated equitable partial-discharge theory under § 105(a))