On a student loan, what is a co-signer’sliability in the case of a default?
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On a student loan, what is a co-signer’sliability in the case of a default?
A student, 19 years old, had student loans and it has been brought to the co-signer’s attention there has been no payments and collections could be started on the co-signers. Is there anyway of protecting the co-signer’s home and other assets?
Asked on November 18, 2010 under Bankruptcy Law, Idaho
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
A party who co-signs a loan can become liable for the payments in the event of a default by the primary borrower. That is the situation you have here. The lender has the right to commence an action against you for the balance of the money owed. If they obtain a judgement they can place a lien as against you and your assets. Transfers made in order to avoid creditors can sometimes be set aside. May I suggest that you seek help with this matter from a debt counselor or attorney in your area to see what can be done. Bring the agreement and all the correspondence you may have. Good luck.
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