Paul L. Caron

Monday, October 4, 2021

Judge Revokes Bankrupt Ex-Lawyer’s $220,000 Student Loan Discharge; Lender Chided His Decision To Work As Outdoor Adventure Guide

Following up on my previous post, Upending Bankruptcy ‘Myths,’ Judge Erases $220,000 Student Loan Debt:  Forbes, He Got $221,000 Of Student Loan Forgiveness, But His Forgiveness Was Just Revoked:

RosenbergAs first reported by the Wall Street Journal, Kevin Rosenberg, a Navy veteran, was granted $221,000 of student loan cancellation in a U.S. bankruptcy court. However, a federal judge in New York, Judge Philip M. Halpern, reversed the bankruptcy court decision, ruling that Rosenberg failed to show why his student loans from college and law school created an “undue hardship.” [Rosenberg v. Educational Credit Management Corp., No. 20-CV-00688 (S.D.N.Y. Sept. 30, 2021)]

In 2020, a U.S. bankruptcy judge in New York, Cecilia G. Morris, ruled that Rosenberg didn’t have to repay his student loan debt because his student loan debt imposed an undue financial hardship. [Cravath filed an amicus brief pro bono on his behalf in conjunction with Veterans Education Success.] Despite the initial ruling, Rosenberg’s student loan servicer, Education Credit Management Corporation (ECMC), appealed the ruling. “Instead of pursuing those opportunities available to him, and paying back his taxpayer-backed federal student loans, Plaintiff, for the past 10 years, has held various positions in the outdoor adventure industry, including starting up and running his own tour guide business,” ECMC wrote in filings.

ECMC alleged that Rosenberg could have earned more income working as an attorney. Rosenberg borrowed $116,500 of student loans between 1993 and 2004. He filed for Chapter 7 bankruptcy in 2018 and asked the court to discharge his student loan debt, which had grown to $221,400, including interest. When he petitioned for bankruptcy, Rosenberg earned $37,600 per year, and after living and debt expenses, his monthly net loss was $1,500.

Wall Street Journal, Judge Revokes Bankrupt Ex-Lawyer’s $220,000 Student Loan Discharge:

A U.S. Navy veteran with a law degree was ordered back to bankruptcy court and stripped of a discharge of his student loans.

Bloomberg Law, Student Loan Borrower’s Elimination of $221,000 Debt Overturned

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