Legal Question in Credit and Debt Law in New Jersey
Cosigner Debt; Bankruptcy
I live in New Jersey. My in-laws just moved in with us so we can take care of them. My father-in-law is termanlly ill and is under hospice care. My wife has power of attorney for medical and financial matters for both her parents.
Very soon after they moved in we received a phone call from a collection agency attempting to collect money from my father-in-law. Apparently he cosigned a car loan for his granddaughter some time in the last two years. She couldn't make the payments and I understand she voluntarily returned the car. This was quite a surprise to us all since there was never any notice of any proceedings or charges sent to my father-in-law. That aside, I have a few questions.
The only assets my in-laws have is a very small bank account and the only income is social security. Paying such a judgement would wipe them out.
Even though my mother-in-law did not cosign the loan, is she liable for this debt upon his death?
Can a collector garnish social security income?
Is it possible this debt will be discharged if my father-in-law (just he) files for bankruptcy?
Might be a silly question, but if my father-in-law passes away before a final bankruptcy decision is reached, does the case continue?
1 Answer from Attorneys
Re: Cosigner Debt; Bankruptcy
Tell the collection agency that your father-in-law has no assets and that he is terminally ill. Tell them not to call again and to sue if they want to pursue the claim. Under the FDCPA they cannot contact you further except to sue and he is judgment proof.
Ensure that only the SS check gets deposited in their account. SS funds are exempt from levy but the judgment debtor must show that SS benefits are the source of the funds. That's easy if the only deposits come from the government.
If the debt collector won't leave you or your father-in-law alone, get a lawyer to help.
See also: http://info.corbettlaw.net/lawguru.htm
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