What to do if my father passed away and left a personal loan solely in his name but used his and my mother’s house for collateral?

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

What to do if my father passed away and left a personal loan solely in his name but used his and my mother’s house for collateral?

My mother has since gone through the probate process and is now the only name on the deed to the house. She is not a co-borrower on this loan but did sign to give him permission to use the house as collateral. The bank is telling her that she is responsible for paying this loan off. Since she is not a co-borrower, is she responsible for paying?

Asked on July 5, 2013 under Estate Planning, Ohio

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Although your mother is not technically a co-borrower, since she consented to the use of her home as collateral for the loan, she is practically speaking responsible for repayment. The fact is that if she doesn't pay the loan then it will go into default. At that point, the lender can sue and obtain a judgement. Once such a judgement is granted, then the lender will have the legal right to "attach" (i.e. seize) the collateral.

Your mother should have an attorney review all documents, etc. related to the loan. They can more fully apprise her of her rights.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption