Hann v. Educational Credit Mgmt. Corp. (In re Hann), No. NH 11-084, 2012 WL 3195135, at *2, *10–*11 (B.A.P. 1st Cir. Aug. 7, 2012) (Hillman, Feeney, Hoffman)

Disallowance of claim of ECMC with finding that $0 was due is preclusive of collection of any student loan debt after discharge notwithstanding that dischargeability was not at issue during claim objection hearing. ECMC filed a proof of claim for $55,000. The debtor objected. ECMC neither responded to the claim objection nor attended the evidentiary hearing. Debtor put on evidence that the student loans had been paid in full before the petition. The bankruptcy court order sustained the debtor’s objection and stated “‘[t]his [c]ourt allows the claim of ECMC in the amount of $0.00.’” After completion of payments and discharge, ECMC took collection action and debtor sought contempt. “The issue is not whether a nondischargeable debt can be discharged by virtue of its disallowance, but whether there is a debt at all where the claim has been disallowed on the grounds of pre-petition payment in full. By definition, where there is no claim, there is no debt and nothing is discharged. . . . [B]y filing the Claim Objection, Hann invoked the appropriate procedural mechanism provided by the Bankruptcy Code to obtain a determination of both the validity and amount of the Claim. . . . [T]he bankruptcy court conducted a thorough review . . . . This process yielded a ruling that the amount of the Claim on the date of Hann’s bankruptcy petition was zero. . . . The court having concluded that there is no extant claim, there can be no liability on a claim and hence no debt . . . . [T]he [order sustaining the claim objection] which is the subject of this appeal effectively precluded any further attempt by ECMC to collect on the alleged student loan debt.”

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