Pupil Loan Discharged in Bankruptcy – simply a Blip, or something like that Bigger?
A choice this month from the Bankruptcy Court in Manhattan (SDNY) might have a significant affect the marketplace for education loan securitizations. Education loan asset-backed securities (SLABS) are unsecured, but market individuals typically assume that the underlying student loans aren’t dischargeable in bankruptcy. a ruling that is new the main judge of the SDNY’s Bankruptcy Court challenges this presumption.
In Rosenberg v. N.Y. State Degree Services Corp. (Jan. 7, 2020), Chief Judge Cecelia Morris discharged the debtor’s student loans and vigorously pressed straight back regarding the “myth” that it is “impossible to discharge student education loans.”
The debtor is a Navy veteran whom graduated from legislation college in 2004,