A determination this month from the Bankruptcy Court in Manhattan (SDNY) may have an impact that is significant the marketplace for education loan securitizations. Education 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 check cashing in the area the principle 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 student that is debtor’s and vigorously pushed right straight right back regarding the “myth” that it’s “impossible to discharge student education loans. ”
The debtor is just a Navy veteran whom graduated from legislation college in 2004, but worked as a lawyer briefly that is only.