Monday, April 20, 2015

Do you really know what it means to co-sign a student loan?

There is a great deal of discussion in the press about student loans and the impact they are having on students and the economy. I think there is less talk about what it can do to parents and other family members. On several occasions, I have had clients come in and talk about being on the hook for their child's student loan. In most cases the child has not accrued assets and is "judgment proof" ... meaning they have nothing for the creditors to seize and sell to recover the debt. But the parents, on the other hand, are usually established, their home has a good deal of equity, and they have assets to protect. So, they pick up the payments when their children default on the payments. It would be no different for anyone co-signing a student loan for someone else.

Image courtesy of ddpavumba at
What makes it worse is when the parents are near or at retirement age. They were coming to a point in their lives where they want to slow down and enjoy what they built for themselves during the prime of their working life. Instead, they are finding themselves with debt more cumbersome than a mortgage. With a mortgage, they could file bankruptcy and walk away from the debt and the property. But with student loans, the ability to discharge the debt is difficult at best; even for the co-signers.

So if someone is planning to co-sign student loans (or any loan for that matter), they really need to consider how it will impact their future if the primary party fails to pay it. It can mean the difference between winters in Florida and working into your 70's. To help people make these decisions, here are a couple articles to consider:

School Loans are still hard (if not impossible) to discharge in Bankruptcy

Should I Co- Sign For a Loan?

The Dangers of Cosigning Private Student Loans

New Scamming Industry growing ... targeting student loan debtors

If you want assistance, legal representation, or just want to know more about Mark Medvesky or Medvesky Law Office, LLC, check out our website at

#bankruptcy #Chapter_7 #Chapter_13 #Montgomery_County #law_firm #Bucks_County #Pennsylvania

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