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  1. #1
    Join Date
    Jan 2013
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    1

    Default Private Student Loans with a Cosigner and Bankruptcy

    My question involves bankruptcy in the state of: Alabama
    My husband and I want to file bankruptcy. Our monthly bills are more than what our monthly income is and our student loans haven't even entered repayment yet! We need (must) include both our federal and private loans in the bankruptcy because once they go into repayment, just the loans will be over $4000 a month. Our income is right at $5000/month net. My mother is a cosigner on most of our Private loans (Sallie Mae) and I do not want her to be affected by this. Is there ANY way to include loans that she cosigned without Sallie Mae going after her for the balance?

  2. #2
    Join Date
    Sep 2005
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    98,846

    Default Re: Private Student Loans with a Cosigner and Bankruptcy

    If you don't want your cosigner to be affected by your default on your student loans, pay your loans.

    If you default, the lenders will go after mom.

    Assuming you are filing Chapter 13, odds are your student loans are nondischargeable and you will thus remain on the hook for the balance when you finish your plan. If we're talking Chapter 7, again assuming nondischargeability, once the stay ends you'll be back on the hook for what you owe.

    The mere fact that your student loans are private does not mean that they are subject to discharge in bankruptcy, outside the very narrow and exceptionally rarely met confines of extraordinary hardship.

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