The Dental Mortgage wasn’t a consolidation financing since the their terms and conditions failed to explicitly cancel the underlying pupil personal debt

40. The Nies court reviewed the legislative history to date and emphasized the unique nature of educational loans that warranted protections under the Bankruptcy Code’s discharge provisions. Id. at 501. Nies notes that § 523 of the Bankruptcy Code was the biproduct of reforms to section 439A(a) of the Higher Education Act of 1965. Id. (quoting Into the lso are Shipman (Dep’t out-of Mental health v. Shipman), 33 B.R. 80, 82 (Bankr. W.D. Mo. 1983)). “[T]his direct link to the federal education statute is an excellent indication that the central issue in determining dischargeability is whether the funds were for educational purposes, not whether the funds constituted a loan.” Id. (quoting Shipman, 33 B.R. at 82). As such, Nies employs the substance of the transaction test to determine the purpose of the loan provided to the physician by the hospital. Id. at 501-06. Nies finds that the hospital had a business purpose and offered the loan to get the Debtor to come to Tift County. Id. at 505. It notes that the “use of the funds by a debtor is not determinative of whether . . . the loan is educational.” Id. at 502 (citing Murphy, 282 F.3d at 873.

Brand new Jubers’ mission is actually underscored of the their inability to help you file Internal revenue service Means 1098-E, which the Borrower would have to subtract the eye towards loan of her fees, until they certainly were instructed to do thus of the its bankruptcy the advice

41. The Nies court explains that “courts have identified several hallmarks which suggest an educational purpose,” including consolidation loans that explicitly cancel the underlying educational debt and create a new one. Id. at 504 (citations omitted). Moreover, Nies emphasizes that courts are “reluctant to conclude that the creditor made the loan for an educational purpose” where the servicecashadvance.com/payday-loans-wa/bellingham/ loan was not made pursuant to some federal program. Id. (citing Resurrection Med. Ctr. v. Lakemaker (From inside the lso are Lakemaker), 241 B.R. 577, 580 (Bankr. N.D. Ill. 1999); Shaffer v. United Student Aid Money (Within the re Shaffer), 237 B.R. 617, 619-21 (Bankr. N.D. Tex. 1999)). The hospital’s loan was not a consolidation loan because the terms of the loan did not explicitly cancel the underlying student debt-the agreement did not contain language about “subrogation, assumption, or discharge of the Debtor’s underlying educational debt.” Id. at 505. The agreement between the parties “reflected a non-educational business purpose for the loan, namely the recruitment of a physician for an underserved rural area.” Id. ” Id.; look for including Segal, 57 F.3d at 347, 349 (concluding that the purpose of the loan from the hospital was not to facilitate the doctor-debtor’s education, “which had long since been completed,” but instead for the hospital to secure her services); Cmty. Mem’l Hosp. v. Gordon (When you look at the lso are Gordon), 231 B.R. 459, 461, 464-65 (Bankr. D. Conn. 1999) (dismissing a nondischargeabilty claim regarding a hospital’s loan to a doctor-debtor because the advance served a business purpose by encouraging the debtor to establish a practice that furthered the hospital’s mission).

The fresh new “first purpose” of your own healthcare within the “stepping into the mortgage would be to after that the fresh new Hospital’s central charity and you will providers mission, rather than to provide the Debtor good money words to restructure his established instructional financial obligation

42. Here, like the hospital in Nies, the Jubers’ purpose in extending the loan was not to enable the Debtor to pursue an education. The hospital had a business purpose-to recruit a doctor to further its own personal mission-and the Jubers had a personal purpose-to protect their son and further their personal mission of setting the children on stable financial footing. Further, the Debtor did not seek out the Jubers’ in hopes of consolidating her debt, and the Debtor was not struggling to make her payments on the Three Original Loans when the Jubers approached her about the Oral Loan. The fact that they did not provide her with the form suggests the purpose of the loan was not educational.