Bankruptcy Ruling Signals Lenience For Student Debtors

Law360 (January 13, 2020, 5:59 PM EST) -- Chief Judge Cecelia Morris of the United States Bankruptcy Court for the Southern District of New York rendered a momentous decision in Rosenberg v. N.Y. State Higher Education Services Corp. on Jan. 7, granting summary judgment in favor of a debtor in an adversary proceeding seeking to have $221,385.49 in student loan debt declared dischargeable in bankruptcy.[1]

Background

The United States Bankruptcy Code contains a well-known provision excepting from discharge student loan debts absent a showing of “undue hardship on the debtor.”[2] Over the years, courts have interpreted the “undue hardship” standard to create an almost insurmountable hurdle — hence, the proverbial...

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