A law school graduate with over $200,000.00 in student loans obtained a discharge from a NY bankruptcy judge in a shocker.
The difficulty in discharging student loans is legendary and this judge was having none of it.
Rosenberg’s consolidated student loan was in forbearance or deferment for 10 years beginning in April 2005. He made 10 payments of varying amounts during the next 26 months.
Morris applied the so-called Brunner test for the discharge of student debt as it was originally intended.
She harshly criticized cases interpreting Brunner as having “punitive standards” and “retributive dicta.”
The Albany Times Union, which noted the “stunning decision,” and the Wall Street Journal have coverage.
The Brunner test considers whether the debtor can maintain a minimal standard of living if forced to repay the loans, whether an inability to maintain the minimum standard is likely to persist for a significant portion of the repayment period, and whether the debtor had made a good faith effort to repay the loans.
It would be interesting if this were to start a trend with other bankruptcy judges revisiting this issue considering student loan debt is an all-time high. Some observers view student loan debt as the next financial crisis.
