QUESTION
If my co-signer is filing bankruptcy where does that leave me?
Asked on Jun 19th, 2015 on Bankruptcy - Georgia
More details to this question:
My parents are filing for bankruptcy. They co-signed on a couple of my school loans. The status of the loans is currently in bankruptcy. I am unable to make payments. Will I still owe the balance?
9 ANSWERS
Student loans are typically not dischargeable. There is a "hardship" exception. Meet with a lawyer face to face to see what you are up against.
Answered on Jun 24th, 2015 at 1:58 AM
Deborah F. Bowinski
Yes, you will still owe the balance of the loan. You should be able to make payments on the loans even though the cosigner is in bankruptcy. Depending upon the type of bankruptcy that was filed the lender may not be able bill you, but you can voluntarily pay.
Answered on Jun 22nd, 2015 at 4:22 PM
If your co-signer files bankruptcy, you typically become 100% responsible for paying the debt. That is why creditors require a co-signer. However, a student loan typically is not discharged in a bankruptcy, so technically, your parents still owe the debt as well. But it is the lender?s choice as to which party to seek to collect from, and my best guess is the creditor will come to you first for payment.
Answered on Jun 19th, 2015 at 5:11 PM
Bankruptcy Attorney serving Livonia, MI
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Charles J. Schneider, P.C.
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Yes and so may they.
Answered on Jun 19th, 2015 at 1:05 PM
Bankruptcy Attorney serving Madison, WI
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Richard B. Jacobson & Associates, LLC
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The creditor can pursue the non-filing co-signer UNLESS the debtors are in a Chapter 13 and have proposed a Plan which will provide for full repayment to the creditor in question. See if your parents will authorize their lawyer to discuss matters with you. He or she my be able to come up wit something or other resourceful to help protect you. (Here's a freebie: let them submit a Plan which provides not for total repayment of the student loans, but only for their paying under the Plan the monthly payments you would have to make. This can feel like an acceptable variation on a 100% repayment, since it is 100% of what is due during the months of the Ch. 13 Plan (ether 36 or 6 months).
Answered on Jun 19th, 2015 at 11:45 AM
Real Estate Attorney serving Florence, KY
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Linda S. Novakov & Associates, PLLC
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Student loans are not dischargeable in bankruptcy generally. You will still be responsible for the balance. There is no reason that you cannot make payments during the pendency of the bankruptcy.
Answered on Jun 19th, 2015 at 11:02 AM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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Need details but you are most probably liable for the full amount.
Answered on Jun 19th, 2015 at 9:36 AM
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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Yes, you'll still owe the balance. However, student loans are not dischargeable, so your parents will still be cosigners.
Answered on Jun 19th, 2015 at 9:36 AM
William Rhymer
Yes, you are still liable for the student loan debt. Your parents will also still be liable unless they get a "hardship" discharge.
Answered on Jun 19th, 2015 at 9:13 AM