Bankruptcy Court Reconsiders Brunner Standard and Dischargeability of Student Loan Debt in Bankruptcy
By: Michael L. Moskowitz and Melissa A. Guseynov
We have previously reported on the judicial treatment of student loan dischargeability in bankruptcy. To this end, we have analyzed how federal courts have interpreted section 523(a)(8) of the Bankruptcy Code, which prohibits bankruptcy courts from discharging most student loan debt “unless excepting such debt from discharge under this paragraph would impose an undue hardship on the debtor and the debtor’s dependents.” 11 U.S.C. § 523(a)(8). In a recent decision from the Southern District of New York Bankruptcy Court, Chief Judge Cecilia Morris analyzed the treatment of student loan debt in bankruptcy under the “undue hardship” exception of section 523(a)(8) of the Bankruptcy Code. Chief Judge Morris determined that, based on the Brunner test, a debtor with a gross annual income of $37,500 could discharge over $220,000 of student loan debt. In re Rosenberg, Case No. 18-09023 (Bankr. S.D.N.Y. Jan. 7, 2020). Read the full opinion here.
