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Home > Ask The Get Out of Debt Experts > Sallie Mae is Coming After My Son After His Co-Signer Passed Away. – Diane

Sallie Mae is Coming After My Son After His Co-Signer Passed Away. – Diane

“Dear Steve,

My father-in-law had co-signed sallie mae student loans for my son approximately seven to ten years ago

My son has been paying interst only on these loans of 68,000 dollars. 40,000 dollars is the portion that was co-signed. In April of this year my father-in-law passed away and know sallie mae is telling us that this money is due in full. which we cannot afford to pay.

Can my son claim bankruptcy on this loan? If not do you have any suggestions on what we can do?



Dear Diane,

I’m sorry to hear about the loss of your father-in-law. He sounds like he wanted to admirably help your son out.

As a cosigner your father-in-law accepted full responsibility for the loan and in his passing his estate would be responsible for any demands for payment. In the absence of the ability for the estate to pay the lender could look towards your son for payment as a co-signer.

The reason the lender sought out a co-signer was because they were looking for someone with deeper pockets they could go after in case your son did not pay. A co-signer has 100% of the liability and 0% of the benefit of the loan.

The demand by Sallie Mae to pay in full would really be created by the loan terms both parties agreed to. I’m not sure specifically why they are accelerating the note at this point.

More information would be needed before you leap to any conclusion about how to best deal with this. First, I would find out if your father-in-law had assets in his estate that were available to satisfy the debt. If so, your son could pay back the estate instead of Sallie Mae.

Second, I would suggest you contact a licensed attorney in your state and hire them to help you figure out if Sallie Mae can make a demand from your son to accelerate the loan. You might also want to try here if you can’t find anyone local.

If you can get the answers to both of those questions and then come back here and post an update in the comments we can talk about next steps.

Right now we have a problem but are lacking enough information to make the best decision possible.

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

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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.

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