Legal Question in Wills and Trusts in Illinois
Hello
[I am a disabled person who is trying to determine what financial responsibilities my family may have in helping me pay back my student loan. I have basically paid back the principal of the loan but because it took a very long time to pay that amount I still owe a large amount of interest on that loan. I am receiving social security disability and therefore do not have the money to pay back the loan interest. My dad and my aunt cosigned on the loan with me. My dad passed away about a year ago. He didn't have a will, and did not make any provisions for my needs after his death. I do know that there was a $30,000 life insurance policy which my dad had initially told me that he was leaving to one of my aunts children. My basic question is can I legally hold my aunt responsible for helping me pay back the remainder of the loan? My dad's life insurance policy was a permanent life insurance policy. My understanding of this type of policy is that it is considered an asset, which can be used to pay back the deceased debts. I'm pursuing this because I know that there is enough assets in the form of the life insurance which could be used to pay back the loan. If that were not available I would not expect my aunt to pay any part of the loan .
1 Answer from Attorneys
The life insurance policy value may have been subject to attachment for debts if pursued by a judgment creditor while your father was alive, but the proceeds of life insurance payable to a beneficiary are not generally subject to claims against the estate. Your aunt may be held responsible by the creditor since she co-signed regardless the life insurance which really does not have anything to do with her. It was your father's policy with benefits paid to a third person. Yours may be the rare circumstance in which the student loan may be dischargeable in bankruptcy, but that would leave your aunt responsible. Any help available from grants of any sort for persons with disability?
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