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legal responsibilities of deceased cosigner on private stude

legal responsibilities of deceased cosigner on private student loan...my father cosigned a private student loan with a granddaughter. he died in may and the loan will come due in dec. does his estate have any responsibility to repay this loan

gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

i don't believe i have ever heard of an estate being held responsible for a debt cosigned before.

it would be rather absurd and perhaps even a heinous act for the lender to seek repayment from an estate in the event of default. not only that, but the obligation wouldn't even go into default until well after the death, to begin with (if ever).

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jerry's picture
jerry | Joined: October 17, 2005 03:24 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi mtbm!

It is the primary borrower's responsibility to pay off the loan. A co-signer's responsibility is pay off the debt only when the primary borrower is unable to do so. You have mentioned that the co-signer is dead. In that case, the primary borrower (grand-daughter) is liable to pay off the debt. In case, if she fails to pay it off, neither the deceased co-borrower's estate not his heirs will be responsible to pay it off.

Thanks,

Jerry

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

If the borrower is deceased is it the the coborrowers responsibility to pay the loan. Loans in question, mortgage and [url=http://www.mortgagefit.com/home-equity.html]home equity loan[/url].

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gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

yes, brenda. when a person cosigns a loan, that person becomes fully obligated to make payments. it is not simply a back-up plan for a primary borrower neglecting to make payments. that's how we as a society treat it, yes; but truly a cosigner is just as liable as a borrower. in the instance you cited, the only remedies are to sell the home or to have the cosigner make payment.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I am in a similar situation as the person at the start of this thread. My grandfather cosigned private student loans for me. So as the answers to this thread state, I should be the sole person resposible for paying of these loans. Will anything happen in probate due to these debts? How should I tell my lenders if at all that he died?

My other question is on the promissory note it says, the loan will go into default and the whole amount of the loan will be due if I or the cosigner dies...does that mean I will have to pay the whole amount of the loan upfront because my cosigner died? Or is it when we are both dead (and just FYI I have plenty of life insurance for this reason!)?

Please help! Thank you

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gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

katrina, you obviously won't have to worry about this debt at all when your time to meet your Maker comes, so don't worry about it now, either.

regardless of that payable on death clause in your note, don't concern yourself with that, either. if you maintain payments, they'll never demand payment in full all at once.

you asked, "how should i tell my lenders if at all that he died?" - again, nothing to concern yourself with. if they ask you, i suppose you could make mention, but they won't ask you. the probating of his estate ought not to be a concern either.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I guess I just want to be sure, my husband cosigned on my sons house, and he is ill with cancer. If he passes away am I as his wife responsible if my son defaults on his house payments?

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smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi ccful!

Welcome to forums!

If your husband co-signed for the loan, then he would be responsible for the mortgage payments in case your son defaults the loan. However, after his death, you won't be liable for the loan payments as you did not co-signed the loan. Your son will have to pay off the dues or else the lender would foreclose the property.

Feel free to ask if you've further queries.

Sussane

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gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

precisely.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

purchased a mobile home in a park had a cosigner 3 weeks later the cosigner passed away one rlitive said i will loose my home to the estate

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smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi sandie!

Welcome to forums!

If you are the primary owner of the property and pay off the mortgage dues on time, then I don't think you will lose the property.

Sussane

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I co-signed on a loan for my dad a mobile home. He passeed away in May 2005 and now this is showing on my credit report as a "judgement". Am I responsible for this even though they came & got the trailer & he is deceased

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smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi John!

Welcome to forums!

As you were the cosigner, you were equally liable for the mortgage. After your father passed away, the lender may have foreclosed the property and you're responsible for paying the deficient amount resulting from the property sale. You may not have paid the balance amount and thus, the lender may have filed a lawsuit and got a judgment against you.

Feel free to ask if you've further queries.

Sussane

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I don't want to beat a dead horse, but I am looking for advice in a similar situation.

My father co-signed on a home mortgage for my brother. My father passed away about a year ago. My brother is now pursuing bankruptcy.

My mother is concerned that she will be liable for the mortgage because she’s responsible for dad’s “estate” and the bank will demand repayment from her or any assets still in dad’s name (her current home, his pension, etc.).

If it matters, this is specific to Indiana.

Should she be concerned?

Either way, how can I find any pertinent laws to have a concrete answer?

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adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Marp,

I don't think your mother should be concerned about it. Nevertheless, it is better to contact a real estate attorney and take his/her opinion in this matter.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Is there a way to buy yourself out of a loan as a cosigner?

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adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Guy,

The primary borrower of the loan will have to [url=http://www.mortgagefit.com/refinance.html]refinance[/url] the mortgage in his or her name in order to remove you as the co-signer for the mortgage.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I took out two loans with sallie mae for school. I defaulted on the loan, I was sued and my wages are being garnished. My grandmother co-signed the loan. They never came after her for anything. She just passed away and the family wants to sell her house. Is the estate responsible for the loan balance?

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jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Gigi,

As you're the primary borrower of the loan, you'll be liable for paying it. I don't think your grandmother's estate will be liable for the loan in any way.

Thanks

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

My Grandma is a cosigner for my student loans, when she dies I assume they don't disappear.. So if I decide to stop paying on them how badly does that effect my credit when they go into default? Also, I just filed bankruptcy so I want all my debt eliminated so is there a way to do that with student loans?

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adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Welcome Sammer,

Your credit scores will be badly affected if you don't pay the student loan. You're the primary borrower for the loan and the lender will come after you in order to recover the debt. Also, student loans don't get discharged in bankruptcy filing. Thus, you'll be liable for the mortgage payments even though you've filed for bankruptcy.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

after divorce a family member helped me refi house to get ex off of mortgage,they passed away,i then modified loan,(big mistake),it messed up my credit,now i am in foreclosure and also bancruptcy,was going to sell house but cant cause there is not clear title due to deceased coborrower.i have decided to include house in bancruptcy,now the former spouse(now remarried btw) of the family member is contacting all "heirs"to see if they are interested in my house.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

can i claim the estate in my bancruptcy to avoid greedy relatives? btw the house is 40k upside down,and deceased had no will so all went to the deceased spouse...

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adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Guest,

This is a complex situation. I will suggest you to contact a bankruptcy attorney and a real estate attorney and take their opinion in this case. They will better guide you in this matter.

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gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hopefully, you can find a real estate attorney who's well-versed in bankruptcy law or a bankruptcy attorney who's well-versed in real estate.

I'd think that if you have "decided to dump the house" it ought not to matter who is interested in buying it, whether "greedy relatives" or liars and cheats. You've given up, yet you're holding on for dear life...I guess that's just the human condition, but it seems a bit contradictory....that's all.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

My situation is kind of the opposite. An in-law was supposed to be a cosigner but the company changed it to "buy for" at the last minute and the in-law was the only person named on the mortgage. If the in-law passed away, and my name is not on the mortgage but I'm the one who has been making the payments, what are my legal rights and responsibilities now?

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jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi SLMH,

If your name is not mentioned on the mortgage docs, then you're not responsible for the mortgage payments. However, if you want to save the property, then you will be liable for refinancing the mortgage in your name and paying off the debt on time after the in-law passed away.

Thanks

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

i co signed for my father a loan because he could not be there to sign the papers due to being in a hospital bed.when the statement comes its only in his name.the place where we got the loan knew i was unemployed and i was seperated from my husband.if something happens to my dad will i have to pay the loan.

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smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi kat!

Welcome to forums!

If your name is not mentioned on the mortgage docs, then you won't be liable for paying the mortgage debt. However, if you want to save the property, then you will have to keep on making the payments.

Feel free to ask if you've further queries.

Sussane

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joshua.heckathorn's picture
joshua.heckathorn | Joined: February 9, 2010 12:28 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

@Kat - are you sure you actually cosigned the loan, or did you just sign on your father's behalf using power of attorney?

If you actually cosigned the loan, you hold as much financial responsibility for the loan as your father does. If anything happens to him, you would need to make payments to keep the home.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I am cosigner on son's private loan. He wants to buy a home but has too much college loan debt. Is it possible for me to take over this loanand remove him so it doesn't hamper his ability to buy a home.

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adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Welcome jev,

I don't think you will be able to take over the loan completely. Nevertheless, you should contact the lender and take his opinion in this regard. He will better help you in this matter.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

My father passed away recently and he had previously cosigned on a car loan for my sister. Unfortunately I am afraid she will leave my mother with the car payments. Is my mother liable for this loan?

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smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi LDWeber!

Welcome to forums!

If your mother has not cosigned for the loan, then she is not liable for the mortgage payments. The lender will come after your sister in order to collect the debts.

Feel free to ask if you've further queries.

Sussane

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gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Precisely - your Mom is not liable for payments on that debt. The responsibility of your Dad as cosigner could be held against his estate, presumably; but she'll have no responsibility for payments. If she chose to help your sister out, that'd be on her of course.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

My sister passed away and left her home to my brother & I. She had a cosigner on an equity loan that was not on the title of my sister's home. The cosigner is now saying my brother & I are responsible for the equity loan. Are we responsible for the loan, can the property be taken or does is the cosigner responsible. The cosigner will receive $50,000 for the house and also inherited money from another estate, so she does have the money to pay the $16,000 equity loan. My sister's estate did not have any cash value in it. The property is in New Hampshire. Thank you for your help.

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jerry's picture
jerry | Joined: October 17, 2005 03:24 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi mike,

Your query has been answered in the given page: http://www.mortgagefit.com/Mortgage-Basics/Responsibility-of-Cosigner-of...

Take a look at it. I hope it will help you.

Thanks,

Jerry

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

My husband passed away 3yrs ago. We did not have a will. I called to see if there are liens against my house other than mortgage. Was told that I have to probate the will before I can sell house. Spouse name on deed not loan. I live in SC. What does this mean?

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jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi MS BJ,

As your husband did not left a will, you won't have to go for a probate. You can file an affidavit of heirship at the county recorder's office and get the property transferred in your name. Once the property is transferred in your name, then you will be able to sell off the property.

Thanks

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

My girlfriends mother cosigned for my loan for a home, I make all of my payments on time .My credit is very good.She is dying and consuming a lot of hospital bills. She has not enough money to pay all of her bills . she is on social security and disabilty. Can the estate or her adult children after her debt take my House?

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smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Joshua!

Welcome to forums!

Is she on the property deed? If no, then you don't have to worry. If she is not on the deed, then she is not one of the owners of the property. In such a situation, neither her creditors nor her heirs will be able to come after your property.

Feel free to ask if you've further queries.

Sussane

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

My husband cosigned on three of our children's student loans. The children are still in school so loans have not started to be repaid yet. I notified Sallie Mae of his death and they have turned it over to a collection agency. I got the threatening calling telling me that I needed to pay the loan in full. I gave them my information (big mistake) but the put a stop payment on the funds before they were due to come out. I am getting calls from them now and actually turned off my answering machine so that they could not leave a message. I don't know if I am responsible for these loans (I did not cosign) Is there anything that they can do to me?

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smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi lynn!

Welcome to forums!

If your name is not on the student loans and if you haven't co-signed for it, then you're not liable for it. Your children can pay them off once they get jobs or else, your husband's estate will pay it off.

Feel free to ask if you've further queries.

Sussane

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