A choice this month from the Bankruptcy Court in Manhattan (SDNY) might have a significant effect on industry for education loan securitizations. Student loan asset-backed securities (SLABS) are unsecured, but market individuals typically assume that the underlying figuratively speaking aren’t dischargeable in bankruptcy. a brand new ruling by the main judge of this 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 forced straight right back on the “myth” that it is “impossible to discharge student loans.”
The debtor is a Navy veteran whom graduated from law school in 2004, but worked as a legal professional only briefly. Continue reading “Pupil Loan Discharged in Bankruptcy – Just a Blip, or something like that Bigger?”