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New York bankruptcy judge rules to discharge woman’s student loan debt

Student Loan Debt

A New York bankruptcy judge made a very rare ruling regarding a debtor’s student loan, as reported by the New York Law Journal in a July 17th, 2012 article.

The debtor was a woman who borrowed close to $17,000.00 for educational expenses however she never completed her education. The judge granted the very rare student loan discharge finding that the facts of the matter were very exceptional and unusual. The debtor, a 64 year old woman, who the court described as “frugal” who was recently laid off from her assembly line job. The court found that she had no prospects of gaining higher employment and was only making $11.00 an hour at her job.

The last fact that led to the judge’s ruling was the finding that the debtor did receive roughly $25,000 from Medicaid or Medicare planning, instead of paying off her student loans she used the money to support her aging parents. In the judge’s finding he stated that under those circumstances he would have done the same thing.

The number of debtors seeking relief from student loans has increased significantly in the last few years, yet it is still rare when a judge rules to discharge these loans. The laws have placed a high standard to reach, showing that the debtors have an undue hardship that will most likely not change.

If you are suffering financial or you are considering bankruptcy contact our office at (800) 660-5299 to set up a free in person consultation. Mr. Lutzky of Jayson Lutzky, P.C. has represented thousands of satisfied clients over the past 29 years. You can visit our website,, for more information.

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