What to o if I have a private student loan that has a death clause that states if I or the co-signer dies the loan is default and due immediately?

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What to o if I have a private student loan that has a death clause that states if I or the co-signer dies the loan is default and due immediately?

My father, who is my co-signer, passed away 2 years ago and I never heard anything from the loan company until this month. They are trying to go after his estate to pay off the student loan. I am still in school. If the estate cannot pay off the student loan, will they force me to pay off the full amount instead of paying once I graduate?

Asked on October 27, 2012 under Bankruptcy Law, Maryland

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

I suggets that you consult with a consumer law attorney as to the legal effect of the clause that you have written about concerning the student loan. Most likely it is valid and the lender can deem the loan due and payable even though you are still in school.

If your father's estate cannot pay off the loan that he co-signed for, there is a good chance that you would be required to pay it off before graduation under the clause that you have written about unless you and the lender reach some other understanding as to how to resolve the matter in writing.


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