Can we still pay our loan if co-signer of private student loan is filing chapter 13? 33 Answers as of January 24, 2014

My wife has a $10k student loan out with Sallie Mae. Her mother is the cosigner of the loan and is planning to file for chapter 13 next week. We have NEVER relied on my mother-in-law to pay the pill. Although we have mediocre credit scores (not high enough to sign for ourselves), my wife and I are still fully capable of paying the loan on time and in it's entirety. Researching forums results in nothing but speculation. Please advise.

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Joseph Lehn, Esq
Joseph Lehn, Esq | Lehn Law, PA
Yes, as co-debtor on the loan you can and should continue to make your monthly payments.
Answer Applies to: Florida
Replied: 1/24/2014
Stuart P Gelberg
Stuart P Gelberg | Stuart P Gelberg
The cosigner's bankruptcy often triggers the default provisions and they will declare the entire balance due.
Answer Applies to: New York
Replied: 1/24/2014
The Law Office of M Grater LLC
The Law Office of M Grater LLC | Mark O. Grater
The attorney who files her Chapter 13 petition should be able to provide for this circumstance in the plan.
Answer Applies to: Connecticut
Replied: 1/24/2014
Elkington Law
Elkington Law | Sally Elkington
You can continue to pay the loan, although there is a co-debtor stay. That means that the loan company may have some issues about collecting funds from you. That might be a stumbling block, but it is not insurmountable. I have not looked at the loan, but most student loans are not dischargeable, so as long as the funds come from you, you probably won't have an issue. All that being said, just keep paying the loan and see what the lender does. If they send you the money back, or don't apply it to the debt, then you have an issue that you might need to get some help from an attorney with. This is not a big problem as you present it.
Answer Applies to: California
Replied: 1/24/2014
A Fresh Start
A Fresh Start | Dorothy G Bunce
It will be in your best interest to continue paying on this loan. In Chapter 13, it is unlikely that your Mother in Law's plan will provide for any payment on this debt.
Answer Applies to: Nevada
Replied: 1/23/2014
    Heineman Law Office
    Heineman Law Office | Jeff Heineman
    Yes, your liability for the loan continues.
    Answer Applies to: Idaho
    Replied: 1/23/2014
    GARCIA & GONZALES, P.C.
    GARCIA & GONZALES, P.C. | Richard N. Gonzales
    There is no speculation. Of course you can pay it.
    Answer Applies to: Colorado
    Replied: 1/23/2014
    Meister & McCracken Law Firm, PLLC | Joanne M. McCracken
    Yes, you can continue to pay the loan if you wish and are able to do so.
    Answer Applies to: Arkansas
    Replied: 1/23/2014
    Law Office of Susan G. Taylor
    Law Office of Susan G. Taylor | Susan G. Taylor
    Don't see why you can't pay you two aren't debtors in bankruptcy.
    Answer Applies to: Texas
    Replied: 1/23/2014
    Idaho Bankruptcy Law | Paul Ross
    You should be able to continue making payments despite a co-signer filing bankruptcy. Her Chapter 13 should also make some payments on the student loan which will help in it being paid down more quickly.
    Answer Applies to: Idaho
    Replied: 1/23/2014
    Barr, Jones & Associates LLP
    Barr, Jones & Associates LLP | Andrew Brasse
    You can still pay on the loan, even if the cosigner has filed for Chapter 13. She should tell her Ch.13 attorney to mark in the paperwork that someone else will be paying on the loans. The trustee will likely ok that as long as someone is making the regular payments.
    Answer Applies to: Ohio
    Replied: 1/23/2014
    Law Office of Shawn N. Wright | Shawn N. Wright
    Yes, you are entitled to pay this loan, but be very firm with Sallie Mae about making the payments. Sometimes, creditors will designate an account as being "in bankruptcy", even though your wife is not the person who is in bankruptcy. So, sometimes I hear folks tell me that the creditor has stated that they "can't accept payments until the bankruptcy is over". This is complete baloney, and do not accept this type of response from Sallie Mae. Insist on making the payments, because otherwise, the interest will accrue like wildfire during the Chapter 13.
    Answer Applies to: Pennsylvania
    Replied: 1/23/2014
    Patrick W. Currin, Attorney at Law | Patrick Currin
    You can still pay. Student loans aren't really dischargable in BK anyway.
    Answer Applies to: California
    Replied: 1/23/2014
    Hoang & Tran PLLC | Adam Tran
    Yes, you can because you are still the principal and therefore still obligated to pay. Student loans are not dischargeable.
    Answer Applies to: Texas
    Replied: 1/23/2014
    Goldsmith & Guymon
    Goldsmith & Guymon | Marjorie Guymon
    Yes, you can continue to pay and should do so.
    Answer Applies to: Nevada
    Replied: 1/23/2014
    Stephens Gourley & Bywater | David A. Stephens
    Yes you can continue to pay. There is a co-debtor stay in chapter 13, but you can pay anyway.
    Answer Applies to: Nevada
    Replied: 1/23/2014
    David Kass | David Kass
    Chapter13 is a repayment plan and should not be as bad credit wise as chapter 7. That said the creditor dept of ed can go vs.either or both co-signers. Dept of ed will take payment. However they may feel the sec.for their loan is compromised and accelerate payment.
    Answer Applies to: New York
    Replied: 1/23/2014
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Continue to make the payments. If there is a hit on your credit because she filed I have attached a memo on how to dispute it. Send a dispute letter to the big 3. They have 30 days to respond.
    Answer Applies to: California
    Replied: 1/23/2014
    Kirby G. Moss PC | Kirby G. Moss
    Clearly you can still pay this loan and Sallie Mae would sooner or later expect you to.
    Answer Applies to: Indiana
    Replied: 1/23/2014
    Michael B. McFarland, P.A. | Michael B. McFarland
    Yes. Student loans are generally not dischargeable in bankruptcy - and this applies to both the principal borrower as well as any co-signer - absent a finding of undue hardship, which is very difficult to establish. Since you are not in default, the lender is not yet seeking payment from the co-signer, and should not have a problem with continuing to accept your payments. The only potential issue would involve the automatic stay (applicable to debtors and co-debtors in chapter 13) that could prevent the lender from sending you monthly statements while the bankruptcy is in progress. In the unlikely event the lender refuses your payments, you should put those funds in a separate account, so you have the funds available when any mess gets straightened out.
    Answer Applies to: Idaho
    Replied: 1/23/2014
    Law Office of Mark B. French
    Law Office of Mark B. French | Mark B. French
    If you have the means to pay the loan and are inclined to do so there is no problem for you in making the payments.
    Answer Applies to: Texas
    Replied: 1/23/2014
    Law Office of Stuart M. Nachbar, P.C.
    Law Office of Stuart M. Nachbar, P.C. | Stuart M. Nachbar
    Yes, you can and should. Primary will still be held liable.
    Answer Applies to: New Jersey
    Replied: 1/23/2014
    Musilli Brennan Associates PLLC
    Musilli Brennan Associates PLLC | John F Brennan
    Yes, you are the primary obligors and can, and should, pay the bill. The bankruptcy, is the guarantee is listed, only will discharge her mother's potential liability ads guarantor, not your wife's obligation.
    Answer Applies to: Michigan
    Replied: 1/23/2014
    The Troglin Firm | William M. Troglin
    Yes you can still pay the student loan. The co-signer would simply list her co-signer obligation in the Chapter 13 schedules and show the student as being paid by maker outside the plan.
    Answer Applies to: Georgia
    Replied: 1/23/2014
    Danville Law Group | Scott Jordan
    Yes, you can still pay the loan.
    Answer Applies to: California
    Replied: 1/23/2014
    Deborah F Bowinski, Attorney & Counselor at Law | Debby Bowinski
    Yes, you certainly can continue to pay the loan while your cosigner is in her chapter 13 bankruptcy. In fact, it will save you significant interest charges in the Lin run if you are able to maintain the payments and keep the loan current.
    Answer Applies to: Colorado
    Replied: 1/23/2014
    Garner Law Office
    Garner Law Office | Daniel Garner
    Your mother-in-law is supposed to list your wife as a co-debtor on the student loan in her bankruptcy filing, but if she does not have the primary obligation to pay, she does not have to plan for it in her Chapter 13. Your wife would have the benefit of the "co-debtor stay" provided by Chapter 13 which means the creditor could not force her to pay while your mother-in-law is in bankruptcy, but she can voluntarily continue to pay (and should.)
    Answer Applies to: Oregon
    Replied: 1/23/2014
    Law Offices of Linda Rose Fessler | Linda Fessler
    Yes, you can pay the bill. But if she is allowed to put it in her Chapter 13 plan.
    Answer Applies to: California
    Replied: 1/23/2014
    Steele, George, Schofield & Ramos, LLP
    Steele, George, Schofield & Ramos, LLP | Alan E. Ramos
    You absolutely want to continue to pay your student loan bill. Your wife is the primary borrower and the failure to make those payments will have a detrimental effect on her credit. Her mother's bankruptcy should have no effect on the loan. This answer was provided as a public service to a question posed on the Law Q & A website. The answer is based on the information provided and is limited to those facts. Furthermore, the answer is based on California law and their application to bankruptcy law in California. Additional information could change the context of the question and materially change the answer.
    Answer Applies to: California
    Replied: 1/23/2014
    David Brodman
    David Brodman | David Brodman
    You can still make voluntary payments on the student loan.
    Answer Applies to: New York
    Replied: 1/23/2014
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    Often the student loan lender may no longer accept payments during the bankruptcy in which case you will go into default. You should call to check prior to her filing.
    Answer Applies to: New York
    Replied: 1/23/2014
    Moore Taylor Law Firm, P.A.
    Moore Taylor Law Firm, P.A. | Jane Downey
    Yes you can pay to preserve your wife's credit.
    Answer Applies to: South Carolina
    Replied: 1/23/2014
    Westgate Law
    Westgate Law | Justin Harelik
    Yes. Absolutely. You don't want to default on those loans. The lender can't collect more than the full amount. If the loans get paid in the Chapter 13 and you are paying them directly, the balance will be reduced quickly. In some cases, the loans are not paid by the Chapter 13 filer. In that case, you definitely want to make the payment directly.
    Answer Applies to: California
    Replied: 1/23/2014
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