Legal Question in Bankruptcy in Michigan

student loan liabilities

My wife cosigned a student loan for her brother long before I knew her. He is unable to pay or at least consistently pay his interest let alone principal on the loan and as such, I have had to make several payments to keep the creditors off of my wifes back. As a stay at home mother she does not work and therefore has no income to pay the loan. Am I legally responsible for the loan by marraige? If I am not, what would happen if he filed for Chapter 11 and she filed as an individual for chapter 11, would that wipe it out? Thanks


Asked on 11/18/08, 11:56 am

1 Answer from Attorneys
Lesley Hoenig Lesley A. Hoenig, Attorney at Law

Re: student loan liabilities

Most individuals do not file chapter 11 because it is a business reorganization. I imagine you are thinking of your wife filing a chapter 7, a liquidation bankruptcy or chapter 13, consumer reorganization (where there is a 3-5 year payment plan). In any event, bankruptcy will not wipe out the debt. Student loans are not dischargable. At the same time, you will not be liable, because you are not a party to the loan, but if the lender gets a judgment against your wife, they can put a lien against any property that she owns. I don't know if there is a basis for this in your wife's situation but there are situations where a lender will provide for a hardship discharge of student loans. But they are very difficult to get and usually require a permanent disability.

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Answered on 11/18/08, 6:23 pm


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