1 ABR 100  UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF ALASKA

In re: Case No. A88-00340	)
	)
MARTIN JOSEPH STUEHR, a/k/a	)
Percy Joseph Stuehr and	)
TATIANA LUCJA STUEHR,	)
	)
Debtors.	)
_______________________________________	)
TATIANA LUCJA STUEHR,	)	Adversary No. A88-00340-001
	)	Chapter 7
Plaintiff,	)
v.	)
	)
ALASKA COMMISSION ON POST-	)
SECONDARY EDUCATION, STATE OF	)
ALASKA,	)
	)
Defendant.	)
_______________________________________	)

ORDER

        This is an action to have an educational loan declared dischargeable due to the imposition of an "undue hardship" pursuant to 11 U.S.C. § 523(a)(8)(B). This court looks to the totality of the circumstances involved in the case to determine whether or not such a debt shall be discharged. In re Birden, 17 B.R. 891 (Bankr. Pa. 1982).

        Here the Plaintiff Tatiana Stuehr filed a chapter 7 bankruptcy petition on April 15, 1988. The debt due the Defendant was approximately $3,573.51 on that date. The bankruptcy arose out of her husband's loss of a job as a vice-president at an Anchorage savings and loan in February, 1988. He is 55 years old and was unemployed for several years following his dismissal.
        1 ABR 101 
        The Stuehr's misfortunes have been substantial. Mrs. Stuehr has been unemployed for seven years due to a variety of maladies including hypertension, ulcers and frequent dizzy spells when standing. She has been unable to obtain medical care for these illnesses due to her husband's lack of health insurance. The sole exempt asset of their bankruptcy was her husband's pension in excess of $50,000.00. The Stuehrs used this pension to pay for living expenses. They also had to pay state and federal taxes totalling $16,000.00 upon the termination of the pension. Having lost their home in Anchorage, they bought a modest home in Portland and used the balance of the pension funds for that purpose and other debts. They still owe $15,000..00 in delinquent IRS and Oregon taxes. The IRS has liened their home, which has a value of approximately $52,000.00 and an encumbrance of $36,000.00. Her husband has a student loan which is nondischargeable. He is Paying $55.00 a month on the loan. While Mr. Stuehr was employed, the payments on the Plaintiff's loan were made in a timely manner.

        The Stuehr's monthly expenses total approximately $1,100.00. Mr. Stuehr has been working for the past few months as a janitor. He makes about $700.00 a month. They borrow money from family to make up the difference. Occasionally, Mr. Stuehr works overtime and receives extra pay. He drives a 1977 Ford which cost $400.00. He has been unable to find any work in the banking community whatsoever. Because of his age, 55, he will not even be hired as a teller.
        1 ABR 102 
        The State of Alaska has liberal deferments available for debtors in need. The State is to be commended for these provisions. In this case, however, they simply forestall the inevitable: Mrs. Stuehr and her husband cannot repay the loan. While the Stuehr's pension benefits could have been used to pay the student loan, food, shelter and taxes rightfully assumed priority. Moreover, the Stuehrs retain a substantial tax liability which will have to be paid in the future despite their minimal income.

        Therefore, based on the totality of the circumstances and with particular reference to the Plaintiff and the Plaintiff's husband's long term of unemployment, the Plaintiff's medical problems, and continuing tax liability, I find that the Plaintiff's educational loan with the State of Alaska constitutes an undue hardship on the Debtor Tatiana Lucja Stuehr and her dependents.

        Accordingly, IT IS HEREBY ORDERED that the debt of Tatiana Lucja Stuehr to the Alaska Commission on Post-Secondary Education is discharged.


DATED: August 14, 1990



DONALD MacDONALD IV
United States Bankruptcy Judge




Serve:	Tatiana Stuehr
	T. Slagle, Esq.
	U.S. Trustee