Opinion
No. 79-10EG
May 17, 1979
Student Loans — Determination of Dischargeability — Subsequent Petition — Res Judicata
A prior determination that a student loan debt was nondischargeable was res judicata in a second bankruptcy proceeding. Thus, the bankrupt had lost the right to have the student loan matter readjudicated in the subsequent bankruptcy proceeding.
In her first bankruptcy petition, the bankrupt scheduled a federally guaranteed student loan. A state education agency, the guarantor of the loan, sought a determination of the debt pursuant to the provisions of Section 439A of the Education Amendments of 1976, 20 U.S.C.A. § 1087-3. The bankruptcy court declared the debt non-dischargeable. On November 6, 1978, the Bankruptcy Reform Act of 1978 was signed by the President ( 92 Stat 2549). Regarding student loans, Section 316 repealed, effective immediately, Section 439A of the Education Amendments of 1976. In an effort to avail herself of the repeal of Section 439A, the bankrupt filed a second petition in bankruptcy, once again listing the student loan debt.
No order of discharge was ever entered in the bankrupt's first case, thus, Section 14c(5) of the Bankrupt Act did not apply However, the court did apply the doctrine of res judicata. Where a discharge in bankruptcy has been denied, or a determination made that a particular debt is nondischargeable, that issue is res judicata, and a bankrupt has lost the right to have the matter adjudicated in a subsequent bankruptcy proceeding. The bankrupt, noted the court, had her day in court and the issue between her and the education agency had been adjudicated. That denial was res judicata, and the bankrupt's present attempt to obtain a discharge of her student loan debt was vexatious and useless repetition. Thus, the court concluded that the bankrupt's application to consolidate her first and second petitions was pointless. Thus, it was denied. See Sec. 14c(5) [§ 727(a)(8)] at ¶ 10,122.