Bankruptcy: In re Taylor

Information that should and should not be reported where there is a bankruptcy.
David A. Szwak

Bankruptcy: In re Taylor

Postby David A. Szwak » Tue Oct 25, 2005 8:29 pm

In re Taylor,
263 B.R. 139, 46 Collier Bankr.Cas.2d 1240, 154 Ed. Law Rep. 549,
N.D.Ala., May 21, 2001

Chapter 7 debtor brought adversary proceeding to recover for government entity's alleged violation of anti-discrimination provision of the Bankruptcy Code, in denying student loan based solely upon debtor's bankruptcy filing. The Bankruptcy Court, James Scott Sledge, J., 252 B.R. 201, entered judgment in favor of debtor, and appeal was taken. The District Court, Guin, J., held that: (1) lender's discrimination against debtor in making loan, in treating debtor's bankruptcy discharge, in absence of any extenuating circumstances, as "adverse credit history," was not equivalent to denial of student loan based solely on debtor's bankruptcy, in violation of bankruptcy statute; (2) lender was under no obligation to disburse any additional funds under its executory, prepetition loan agreement; (3) bankruptcy statute which prohibits lenders from refusing to make student loans based solely on applicant's bankruptcy filing does not create private right of action; (4) debtor could not recover emotional distress damages; (5) debtor was not entitled to award of punitive damages; and (6) bankruptcy court had no jurisdiction to enter attorney fee award against federal government.
Reversed.

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