Liability For Cosigners on Student Loans

Liability For Cosigners on Student Loans

Richard Fonfrias, J.D.
Chicago’s Financial Rescue & Bankruptcy Lawyer
Fonfrias Law Group, LLC


When students default on their student loan obligations, parents or other relatives who were enlisted as cosigners are often left holding the bag.

Options include the cosigner seeking a release from the student loan obligation. But since most student programs that require a cosigner are private student loans, 90% of these applications are rejected.

Another way to erase the obligation is for the student loan to be paid, either by paying off the old loan or refinancing with a new loan. This sometimes works depending on the cosigner’s ability to get new financing to pay off the loan.

Yet another way for the borrower or cosigner to get released from a student loan debt is by showing undue hardship through bankruptcy. Bankruptcy courts differ on how they handle student loan discharges and each case is reviewed on its own facts.

If a cosigner files Chapter 13 bankruptcy, the cosigner may pay part or all of the student loan through a Chapter 13 repayment plan. Student loans are usually treated in equal portions with other unsecured creditors.

If you have questions about your obligations under a student loan, or any type of loan, you’re invited to call me at 312-969-0730.