A man named Kevin Rosenberg took sighs of relief when the judge presiding over his bankruptcy petition struck the hammer in his favor. To his delight, the judge stripped him of the burden of $221k student loan that had been piling up since 1993. That discharge gave some rays of hope to other defaulters as well.
Student loans have become an instrument mean of achieving heights in academics in today’s era. Students can dream as big as they can with its power. But the obligations that accompany this rosy picture often put them on the brink of a breakdown. A man named Kevin Rosenberg had a close shave with one such experience.
Rosenberg looked up for a degree in history from the University of Arizona. But his efforts were not enough. He needed financial backing for that spree. To his delight, he came across the idea of going for a student loan in 1993. He managed to secure one and ended up winning a degree from the University. After that, he moved to the U.S. Navy to have a blasting career.
But his mind could keep him there for more than the tenure of 5 years. That prompted him to look back at Cardozo Law School at Yeshiva University for further studies. To make some advancement on that trail, he ended seeking more financial help in the form of student loans.
Finally, his graduation spree ended in 2005 with his student loan ticking to $116,464. That was a big amount for him to pay back. His conditions could not power him up to fill the dug hole. As a result, the amount expanded at a very high rate and reached the mark of $221,385 in (November)2019. The high-interest rates played a significant role in giving it that push.
Kevin had sensed the alarming situation back in 2018. So he had acted pragmatically and filed for chapter 7 bankruptcy in March 2018. He was well-aware of the low success rate of the discharge of student loans through that route. But he went ahead to give it a try. With the start of proceedings in that matter, Kevin put in in his might to present his conditions before the court. He put up his negative monthly income trend and proved his sincere efforts in meeting his interest rate obligations.
To his delight, his efforts paid off! The judge took account of his hardships and order to discharge his huge student loan by taking up the famous Brunner’s test scenario. Hence, the default streaks of the distressed borrowers came to an end.
Taking on the aspects of discharge of students loans, Adam S. Minsky (a student loan attorney) wrote in Forbes, “It is very difficult, although not completely impossible, for borrowers to discharge student loans in bankruptcy. The federal bankruptcy code treats student loans differently from other types of consumer debt (such as credit card debt or medical debt). In order to discharge their student loans in bankruptcy, student loan borrowers must prove that they have an ‘undue hardship’ that would prevent them from repaying their student loans”.
Adding to that, he commented, “The judge rejected the rigidity of the undue hardship standards established by prior courts, writing that this particular court would not ‘participate in perpetuating these myths’ that it is impossible to discharge student debt in bankruptcy”.
Thus, the hope for other 44 million defaulters is floating in the air!