What are a co-signer’s rights in the event of a default?

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What are a co-signer’s rights in the event of a default?

My fiancée’s father recently called saying that collectors were calling for his ex-wife. Apparently his father had co-signed for a student loan for her many years ago and now she has defaulted on it. When asked about it, she stated that she was filing for bankrupcy and that she wasn’t going to pay for it. This is goig to affect his credit. Is there anyway that he can sue her for the cost of the loan or will it be thrown out since she is filing bankruptcy?

Asked on October 15, 2013 under Bankruptcy Law, North Carolina

Answers:

Terence Fenelon / Law Offices of Terence Fenelon

Answered 7 years ago | Contributor

first of all, student loans are non-dischargeabale in bankruptcy so the person who is attempting to avoid loability will not obtain relief.  Secondly, as a co-signer, an individual is liable for the debt.  Is there a divorce decree in effect which contains an indemnification clause? If so, he may be able to get relief from the divorce court.


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