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Can Student Loans Take Part of Our Inheritance? – Lisa

“Dear Steve,

My husband is recieving a 22.000.00 inheritnance, he has student loans out there, Student loans take a percentage of his disability, my question is can the Student Loans take his inheritnance money? We want to pay our credit cards off, pay my mother back for money borrowed and put back money in my savings account that he has used, this account was mine before we married if that matters. Please help me figure some of this out if you can. Thank you!

What can we do to be able to keep tis money, we are not well off and really need to put as much as we can back, my health is not good so I worry about our future, Please let us know if student loans can take his ineritnance money, they already take a percentage of his disability check and take any money his tax refund may be every year, now how about this inheritnance money? We owe quite a bit, to family and credit cards, can we pay all these off.


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The Answer

Dear Lisa,

It’s not worth trying to hide the money. If asked for an updated financial statement and you lie about it, that’s a real mess.

It seems there may be two courses of action you should pursue in regarding to the situation.

First, if you have already done so I’d explore if his student loans are dischargeable due to his disability. Here are the details on student loan discharge and cancellation.

Second, if things are that tight and bad you should probably consider bankruptcy to deal with the debts you have no reasonable expectation to deal with. You can click here to find a local bankruptcy attorney. The bankruptcy attorney will be in a better position to advise you about the inheritance issue when you talk to them for your free consultation.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

Can Student Loans Take Part of Our Inheritance?   Lisa
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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • nicholas


    i co-signed a few student loans for a best friend yrs ago and he never paid on them and now the debt collection agency is after me for payment. Can they seize any inheritance that i may be left with when my grandmother passes?

    • Steve Rhode

      They can certainly pursue you for the payment, including suing you. As the cosigner you are unfortunately 100% responsible for the debt if the other person does not pay.

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