Student Debt Servicer ECMC Appeals $221,000 Bankruptcy Discharge

Educational Credit Management Corp., a student loan servicer, is appealing a New York judge’s headline-grabbing bankruptcy discharge of a borrower’s $221,000 student debt, arguing that the ruling broke from 32 years of case law.

ECMC’s Jan. 17 appeal follows a ruling earlier this month by Judge Cecelia Morris of the U.S. Bankruptcy Court for the Southern District of New York that a U.S. Navy veteran could cancel his loans through Chapter 7 because he satisfied his burden under the “Brunner test” that the debt would create an “undue hardship.”

The challenge, seeking review by a federal district court, centers on ...